Well the Island did not matter in this case unfortunately.
West Ham sponsor enters insolvency after Swiss currency crisis
The sponsor of West Ham football club, Alpari UK, has become the latest casualty of the currency crisis sparked by the Swiss central bank.
Alpari UK, which lists its head office at Bishopsgate in the City, said it was insolvent because of the scale of the losses suffered by its clients following the move by the Swiss central bank to allow its currency to float freely on the foreign exchange markets.
It is among a string of companies feeling the impact of the sharp move in the currency markets on Thursday. Spread-better London Capital said it had £1.7m of exposure as shares fell 14% while other firms, such as City Index, were issuing statements reassuring their clients.
Alpari blamed its problems on market volatility. “The recent move on the Swiss franc caused by the Swiss National Bank’s unexpected policy reversal of capping the Swiss franc against the euro has resulted in exceptional volatility and extreme lack of liquidity,” said Alpari, which signed a three-year deal with the football club in 2013 worth £3m a year.
“This has resulted in the majority of clients sustaining losses which has exceeded their account equity. Where a client cannot cover this loss, it is passed on to us. This has forced Alpari (UK) Limited to confirm today, 16/01/15, that it has entered into insolvency,” it said. It said that any funds held on behalf of clients were kept in separate accounts as required by rules imposed by the Financial Conduct Authority.
Analysts at Alpari had described the decision by the Swiss central bank to stop holding its currency at €1.20 as “idiotic” in the immediate aftermath of the move on Thursday which took the markets by surprise.
The Swiss currency rocketed by almost 40% against the euro and the dollar. CMC, the money broker, had also incurred losses, its chief executive Peter Cruddas said. But he stressed the business was still strong. “It’s business as usual,” the former Conservative Party treasurer said.
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“Like many of our competitors, CMC Markets sustained some losses, however, the overall impact including possible bad debts has not materially impacted the group,” Cruddas said.
Broker IG was one the first to admit it faced potential losses of £30m and on Friday City Index said it had not suffered any major impact.
“It has come to our attention that a number of retail brokerages have announced that this has resulted in them experiencing acute financial pressure. Following this and queries from customers, we would like to take the opportunity to reassure our clients and confirm to the market that City Index has not suffered any material impact as a result of yesterday’s volatility and our financial position has not been affected,” City Index said.
Overnight the US foreign exchange brokerage FXCM warned it clients were experiencing significant losses. This has “generated negative equity balances owned to FXCM of approximately $225m,” the New York firm said. “As a result of these debit balances, the company may be in breach of some regulatory capital requirements. We are actively discussing alternatives to return our capital to levels prior to today’s events and discussing the matter with our regulators,” it added.
A New Zealand broker, Global Brokers NZ, said it was closing down as it could no longer meet local regulatory requirements.
http://www.theguardian.com/business/2015/jan/16/west-ham-sponsor-alpari-swiss-currency-crisis
