ITI Capital: when segregated assets stop being liquid assets

ITI Capital entered special administration on 25 September 2026 after a year-long wind-down in which clients were warned that transfers could be slow and some securities might not be accepted elsewhere. The case does not establish a client-asset shortfall. It does establish a harder truth for founders, funds and investors: regulated custody is also an operational-continuity risk. The real test is whether assets can be proved, moved and used when a provider’s normal systems stop.

An ITI Capital client who needed money for payroll, a house purchase, a fund distribution or a margin payment faced the same immediate problem on 25 September 2026: the broker holding the assets had entered special administration.

Teneo’s Duncan Perring and David Soden were appointed as joint special administrators that day. The first client documents appeared. The proposed return-and-claims process is due within eight weeks.

For a client with a payment due now, eight weeks is not a footnote. It is the story.

No available material says ITI clients have suffered a client-asset shortfall. That distinction matters. But ownership and access are not the same thing. Cash can belong to you while you cannot withdraw it. Shares can remain yours while you cannot sell or transfer them.

Safeguarding is not liquidity.

Most people hear that client money is segregated, meaning kept apart from the firm’s own money, and assume the danger has passed. They hear “FSCS protection” and picture an emergency cash machine.

The real journey is less tidy: identity checks, record matching, court approval, administrator costs, claims and a new broker willing to accept the assets. The protection may be real. The delay may be real too.

The warning came before the administration

ITI stopped most regulated activity on 10 August 2025. Its wind-down FAQ required refreshed KYC, the identity checks financial firms must perform, and FCA consent before a sale, withdrawal or transfer. Active trading was prohibited. Transfer times were not guaranteed. Another broker might not accept some illiquid securities, investments that are difficult to sell or move.

At the same time, ITI said segregated money was safe and that no solvency threat was anticipated.

Both statements could be true. That is the uncomfortable part.

A client could have a legal claim to assets while the normal route for moving them was narrowing. Once formal administration begins, the question changes from “Can I instruct my broker?” to “What does the administrator’s process permit, and when?”

The appointment material says distribution costs, including administrators’ fees, may be deducted from client pools where the firm’s own estate cannot pay. Eligible FSCS claims may cover qualifying costs and shortfalls, but only within the aggregate £85,000 limit.

Aggregate does heavy lifting here. It can mean the same £85,000 ceiling must cover both a loss and a client’s contribution to the cost of returning assets.

The documents do not promise a transfer date. They begin a process.

For a board, that is the lesson. A regulatory badge is not an exit plan.

Futu Securities. Photo: Wandenging Biimou / Wikimedia Commons, CC0.

The rescue broker that showed the problem first

ITI Capital was not a random name in this story. It was selected as the receiving broker for clients of SVS Securities, the failed UK investment firm.

On 11 June 2020, SVS transferred £23.7 million of client money and more than £250 million of assets to ITI. More than 99% of around 18,600 clients were expected to regain access from 24 July 2020.

At first glance, that reads like a clean rescue.

It was not clean for everyone. Financial Ombudsman Service decisions on ITI’s handling of the SVS transfer later found unacceptable delays, missing audit trails and incorrect balances. Some holdings remained untransferred in February 2021.

The SVS transfer showed that moving assets to a regulated broker does not automatically restore usable client access. Photo: Mathias Reding / Pexels, Pexels licence (free commercial use).

Those findings matter because they describe the mundane mechanics that decide whether a transfer works. A bulk movement of assets is not the same as a working account. Each client still needs an accurate record, a usable balance and holdings that can actually be dealt with.

This is where most people stop looking: after the announcement that assets have been transferred, but before asking whether each account holder can see, verify and use them.

Put ITI and SVS side by side and a pattern appears that the usual language around segregation misses. The risk is not only that assets disappear. It is that the evidence proving ownership, and the systems allowing movement, fail at the moment they are needed most.

That is similar to the issue explored in what can still stop funds after investment documents are signed. A signed agreement and released cash are different events. So are safeguarded assets and usable assets.

Why investors still accept pooled custody

Experienced investors know that many brokers and platforms use omnibus custody, where holdings for many customers are pooled rather than held in separately named accounts. It is not automatically reckless. It can operate with regulated firms, segregated client assets and routine reconciliation.

Investors accept it because the normal promise sounds persuasive: the provider is authorised, customer assets are kept apart from the firm’s own money, and compensation may exist if something goes wrong.

Those safeguards address genuine risks. They do not remove dependency on the platform’s records, its reconciliation process and the receiving broker’s willingness to accept the position when things go wrong.

That is the distinction. Omnibus custody is not necessarily the danger. Unexamined reliance on a single provider’s ledger and transfer machinery is.

America’s missing ledger

The sharpest version of that problem unfolded in the United States after Synapse, the financial-technology company whose records connected customers, platforms and banks, entered bankruptcy on 22 April 2024.

The Consumer Financial Protection Bureau recorded $46.25 million in allocations for Synapse victims on 28 November 2025, followed by another $8.97 million on 29 May 2026. Those were real payments.

Yet Banking Dive reported on 17 September 2026 that thousands of users remained out as much as $95 million, more than two years after the bankruptcy, with no published payment timetable. The CFPB had previously identified a $60 million to $90 million mismatch between bank-held funds and Synapse’s account records.

Here is the twist. Money being held at a bank was not enough. Someone still had to establish, account by account, who owned what.

The failed assumption was that pass-through deposit insurance also guaranteed a dependable ownership ledger and quick access. It did not.

For a business using layered payment platforms, the practical question is blunt: who holds the definitive record? If the platform stops operating, can the bank, custodian and company independently reconstruct the balance?

A full recovery can still arrive too late

Australia provides the important counterexample. Prospero Markets, an Australian financial-services firm, entered liquidation on 10 April 2024. ASIC said approved customers were expected to recover 100%.

That sounds like the happy ending. It was not an immediate one.

Court directions were required before distributions could begin. Claims, overseas-entity entitlements, bank details and liquidator costs had to be resolved. A$18.1 million was distributed in July 2025, 15 months after the appointment.

The evidence does not say every broker collapse destroys client wealth. It says even full recovery can come too late for someone who needs funds for an obligation due today.

Imagine a company with three months of payroll held through a provider that becomes unusable for 15 months. Its eventual recovery rate is almost beside the point.

Hong Kong shows a more targeted outcome. On 30 July 2026, the Securities and Futures Commission froze up to HK$125.247 million in specified accounts at Futu Securities, the Hong Kong brokerage platform, over suspected IPO fraud. Futu was not under investigation and other customers were unaffected.

Granular records did not make the restricted assets liquid. But they prevented one suspected problem from immobilising every customer.

India has sought to make the timetable clearer. SIC Stocks & Services was declared a defaulter on 8 July 2026. SEBI’s investor charter provides for pre-filled claims by T+30, processing within 60 days and a default declaration by T+90. Protection limits differ, currently up to ₹35 lakh at NSE and ₹16 lakh at BSE.

Explicit milestones improve predictability. They do not remove eligibility tests, paperwork or the need to complete a claim.

The £85,000 figure has an asterisk

The UK’s WealthTek case explains why a compensation number should not be treated as a simple guarantee.

By 13 May 2025, FSCS said many WealthTek clients had received shortfall compensation. But the £85,000 limit included both the asset shortfall and each client’s administration-cost contribution.

Then, on 25 June 2026, the FCA secured a further £31.7 million from CACEIS UK, the sub-custodian holding assets for another custody business. The FCA said this brought recoveries from CACEIS, Barclays and Sapia to more than £57 million.

That is good news. It is not proof that every client with losses above the compensation ceiling was made whole.

What surprised us across ITI, Synapse, Prospero and WealthTek was not how different the rules are. It was how often the same bottleneck appears. Ownership protection answers one question. The ability to use money before delay causes a second loss answers another.

GI Network's view: ITI Capital does not yet prove a client-asset shortfall. It does prove that boards should measure custody risk by time to exit and time to restore operations, not by a provider’s regulatory status alone.

Build the exit while the systems work

For founders, fund managers and finance teams, the first task is not predicting ITI’s final outcome. It is ensuring a similar disruption would not stop the business.

Within 30 days, export transaction records, tax records, beneficial-ownership documents and position statements. List every bank, nominee and sub-custodian. Refresh KYC. Test a withdrawal where normal operations permit it. Open a contingency broker and obtain written confirmation that it can receive every security held.

Flag private investments, certificates, sanctioned assets, disputed holdings and illiquid securities. A backup account that cannot receive the actual portfolio is theatre.

Within 60 days, set exposure limits by legal entity, not merely by brand. Keep payroll and operating runway separate from investment cash. Document FSCS eligibility and calculate whether the £85,000 limit could be consumed by a shortfall, return costs or both.

Within 90 days, run a broker-failure simulation. Include suspended trading, delayed dividends, margin calls and blocked payroll. Pre-authorise emergency signatories. Require quarterly evidence showing where assets sit, whether records reconcile and whether they can be transferred.

This belongs in the same conversation as funding the proof rather than the fantasy. Raising money is not enough if a company cannot use it during a counterparty disruption.

What investors should ask on a bad Tuesday

First-time investors often ask whether a broker is regulated. Experienced investors ask what happens on a bad Tuesday.

They identify the legal holder of each material asset. They ask whether records are maintained in named accounts or pooled omnibus accounts. They establish who reconciles balances, what evidence is available outside the platform and whether a replacement provider will accept the holdings.

They also separate solvency from access. A provider can be financially sound and still trap clients in a manual transfer process. A provider can fail and still return every pound, too late to meet an obligation due today.

GI Network would turn that concern into a decision-ready evidence pack: map the legal holder, asset location, transfer dependencies, compensation assumptions and operational exposure; test whether cash flows can survive a six-month lock-up; identify which holdings a replacement provider will actually accept; and rehearse the objections a board, lender or investment committee will raise. That work cannot decide an individual ITI claim. It can prevent the next custody arrangement becoming a blind spot.

The Usable-Assets Test

The evidence points to one framework worth keeping on a board agenda: the Usable-Assets Test.

Before trusting any broker, custodian or platform, ask four questions:

1. 1.Proof: Can we independently show what we own, with current records?
2. 2.Portability: Has another provider agreed to receive every material holding?
3. 3.Runway: Can the business operate for six months if this account cannot be used?
4. 4.Recovery: If something is missing or delayed, who pays the costs and what compensation limit applies?

If any answer is uncertain, the assets may be safeguarded.

They are not yet usable.