Jersey’s royal court has decided that, as HSBC Global Asset Management (International) Limited (HSBC GAM) needs to complete its liquidation process, the assets belonging to clients that the firm was not able to contact will be handed to HM Receiver General.
He is appointed by the Queen to administer the affairs of the Crown’s estate in Jersey.
The Receiver General will hold the assets for up to 10 years, so that clients will be able to claim the cash back within that time window.
Winding up
The Jersey-based firm stopped providing discretionary wealth management services in 2016 and informed all of its clients on the matter, in order for them to decide what they wanted to do with their assets.
At the time HSBC GAM held £454m ($549.5m, €493m) worth of assets belonging to 449 clients.
But the firm said that not all of its customers replied and that it was unable to identify the ones who didn’t respond to its notice.
Problems arose when HSBC GAM was placed into liquidation to be wound up on 7 June 2018, with two Deloitte representatives named as joint liquidators.
To go through with the liquidation process, the asset manager was forced to sell all the equities held on behalf of those unknown clients.
As of 21 May 2019, the Jersey subsidiary of HSBC had £223,009 and $5,009 (£4,140, €4,494) of unclaimed assets belonging to those customers.
Legal advice
In order to complete the liquidation process, however, the firm needs to dispose of such cash assets, and it sought the judgement of Jersey’s royal court to find a solution.
The judge said: “It was appropriate for the court to order the joint liquidators be authorised to appoint the cash assets held by [HSBC GAM] to the Receiver General.”
Many of the assets are over 15 years old, with some as old as 30 years.
If any of the unknown clients were to come forward to claim their money back, they will be redirected to the Receiver General, who will levy an administration fee, amounting to £500 or 5% of the assets transferred, whichever is greater.
