Trust status for ‘surpluses’ account set up during wind down of SFA member firm

Abstract

The applicants in this case were the liquidators of Branston & Gothard Ltd. Branston & Gothard Ltd (Branston & Gothard) were stockbrokers authorised to conduct investment business under the Financial Services Act 1986 by virtue of their membership of the Securities and Futures Authority (SFA). Their main business consisted of portfolio investment management business on behalf of clients (this business being divided into discretionary, advisory and execution only business) and provision of single company and general PEPs. During the 1990s Branston & Gothard had contracted out its back office administrative functions to Carr Shepphards Ltd. who, as unsecured trade creditors of Branston & Gothard, were second respondents in this application. Unfortunately, Branston & Gothard began making losses in 1997 which led to SFA having concerns as to the firm's capital adequacy, reconciliation work as to verification of securities held and resolution of inquiries. In light of these concerns SFA served an intervention order on 2nd April, 1998 pursuant to rr 7–12 to 7–19 SFA Rules which ordered Branston & Gothard to:

Citation

Gray, J. (1999), "Trust status for ‘surpluses’ account set up during wind down of SFA member firm", Journal of Financial Regulation and Compliance, Vol. 7 No. 4, pp. 379-384. https://doi.org/10.1108/eb025024