Alpari Accounts Frozen Since Franc’s Surge May Pay Out in Weeks

Clients of Alpari (UK) Ltd., the London-based currency broker that ceased trading in the wake of January’s Swiss franc turmoil, may receive payments based on their account balances within weeks, according to administrator KPMG LLP.

The first payments will be made to customers whose accounts were covered by the Financial Conduct Authority’s 50,000 pound ($74,565) deposit-protection limit, according to Richard Heis, a partner at KPMG. Some other claims against the company may take years to be resolved, he said at a meeting for clients and creditors in London Thursday.

Alpari (UK) entered insolvency after the Swiss National Bank’s unexpected announcement on Jan. 15 that it would remove its cap on the franc’s appreciation. Switzerland’s currency surged over 15 percent against more than 150 counterparts and a gauge of foreign-exchange volatility jumped to an 18-month high, leaving many of the broker’s clients with trading losses.

The biggest challenge facing Alpari’s administrators is how to value accounts that executed trades in the franc amid the turmoil, Heis said.

FXCM Inc., the largest U.S. currency brokerage for retail clients, said in a statement dated March 11 that most of the major international banks that provided it with liquidity stopped sending price quotes as the franc surged, making trading more difficult.

Alpari was not the only retail currency broker to suffer because of the franc’s gains. FXCM received a $300 million cash infusion from Leucadia National Corp., while IG Group Holdings Plc, Swissquote Group Holdings SA, CMC Markets Plc, FxPro Group Ltd. and OANDA all said they suffered losses on franc trades.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE