Beaufort Securities, the struggling City broker, has been declared insolvent by the UK’s financial watchdog.
The move came after the Financial Conduct Authority carried out an assessment of the finances of the small-cap stockbroker, which caters largely to retail clients, and Beaufort Asset Clearing Services, its corporate client arm.
The regulator said that insolvency practitioners would take over the running of the firm in order to “protect assets from dissipation and protect the customers”.
The High Court had appointed three consultants with PwC as join administrators of both companies following an urgent application from FCA.
The troubled broker and wealth manager has been under the FCA’s spotlight recently, hit with a string of regulatory restrictions — including limits on its discretionary powers. The move by the FCA comes as brokers face increasing pressure from falling commissions, a fairly subdued initial public offering market and greater compliance requirements — including Europe’s latest Mifid II legislation which came into force in January.
The watchdog on Friday said that Beaufort was required to “cease all regulatory activity and not to dispose of any firm or client assets without the FCA’s consent”, and that the joint administrators would be in contact with Beaufort’s customers “in due course”. Copyright The Financial Times Limited 2018. All rights reserved.
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