BBY Ltd

Background

BBY Ltd (BBY), the main operating entity of the BBY group, was a financial services licensee headquartered in Sydney with offices in Adelaide, Auckland, Brisbane, Gold Coast, London, Melbourne, New York, Perth and Wellington. BBY was also a market participant of ASX, Chi-X and SSX (formerly APX), and a clearing and settlement participant of the ASX.

The BBY group consisted of 10 entities and included two other financial services licensees: BBY Advisory Services Pty Ltd and SmarTrader Limited.

On 17 May 2015 Stephen Vaughan and Ian Hall of KPMG were appointed as joint and several voluntary administrators of the 10 BBY companies, including BBY, BBY Advisory Services Pty Ltd and SmarTrader Limited.

On 18 May 2015, Steven Parbery and Brett Lord of PPB Advisory were appointed receivers and managers of BBY and BBY Advisory Services Pty Ltd, and trading by BBY on the ASX, Chi-X Australia and SSX markets was also suspended.

On 28 May 2015, ASIC suspended the Australian financial services (AFS) licences held by BBY, BBY Advisory Services Pty Ltd, and SmarTrader Limited (refer: 15-133MR).

At the second creditors meeting on 22 June 2015, it was resolved to place BBY (and some other BBY companies) in liquidation and Stephen Vaughan and Ian Hall of KPMG were appointed as Liquidators.

On 3 July 2015, BBY’s participation in the ASX settlement facility was suspended.

What is voluntary administration and liquidation?

Voluntary administration is where the directors of a financially troubled company or a secured creditor with a charge over most of the company’s assets appoint an external administrator called a ‘voluntary administrator’.

The role of the voluntary administrator is to investigate the company’s business, property, affairs and financial circumstances, to report to creditors and to recommend to creditors whether the company should enter into a deed of company arrangement, go into liquidation or be returned to the directors.

Another responsibility of the voluntary administrator is to report to ASIC on possible offences by people involved with the company. If breaches are reported, ASIC will assess the reports to consider its own investigations and action, if any.

Liquidation is where:

  • the creditors of a company vote for liquidation following a voluntary administration;
  • an insolvent company’s shareholders resolve to liquidate the company and appoint a liquidator; or
  • the court appoints a liquidator to wind up a company following an application, usually by a creditor.

It is possible for a company in liquidation to also be in receivership.

The purpose of liquidation of an insolvent company is to have an independent and suitably qualified person (the liquidator) take control of the company so that its affairs can be wound up in an orderly and fair way for the benefit of all creditors.

If a liquidator suspects that people involved with the company may have committed offences and the liquidator reports this to ASIC, the liquidator may also be able to apply to ASIC for funding to carry out further investigations into the allegations.

More information on voluntary administration and liquidation.

What is the role of a receiver and manager?

The receiver and manager’s primary role is to collect and sell enough of a company’s charged assets to repay the debt owed to a secured creditor.

ASIC’s role

ASIC notes that BBY was a market participant of ASX, Chi-X and SSX, and a clearing and settlement participant of the ASX. BBY was also a financial services licensee and was authorised under its licence to issue and make a market in derivatives and FX. ASIC notes that BBY’s AFS licence was suspended by ASIC on 28 May 2015 (refer: 15-133MR).

Throughout this process we have been in close contact with the ASX as the relevant market operator and central clearer for the equities and exchange traded options markets, with KPMG as the voluntary administrator and liquidator and with PPB Advisory as the receiver and manager.

ASIC will consider further the circumstances surrounding the voluntary administration, liquidation and receivership of BBY, particularly those concerning compliance with laws on governance, disclosure and conduct.

Under the law, including the Corporations Act and Market Integrity Rules, licensees and market participants must keep client money separate from their own. This is an important safeguard to protect the interests of retail investors.

Client money must be adequately protected.

Assetless Administration Fund

On 24 August 2015 ASIC received an application from KPMG for funding under the Assetless Administration Fund (AAF) for investigations into BBY. The AAF provides funding for preliminary investigations and reports by registered liquidators into company failure where the companies have few or no assets and where it appears to ASIC that enforcement action may result from the investigations and reports. ASIC is considering the KPMG application.

On 9 February 2016, ASIC decided not to approve KPMG's application for funding under the AAF.

Regulatory Guide 109 Assetless Administration Fund (RG 109) covers the criteria for funding

Transferring sponsored holdings to another broker

On 3 July 2015, BBY’s participation in the ASX settlement facility was suspended by ASX Settlement Pty Limited.

Clients wishing to transfer holdings sponsored by BBY to another broker should follow the ASX's instructions set out here

Help for investors and AFS licensees

Investors and AFS licensees seeking information should contact:

KPMG (Liquidator)

Contact: Mr Stephen Vaughan and Mr Ian Hall

Email: bby@kpmg.com.au

Website: http://www.kpmg.com/au/en/services/advisory/transactions-restructuring/restructuring/bby/pages/default.aspx

PPB Advisory (Receiver and Manager)

Contact: Mr Stephen Parbery and Mr Brett Lord

Email: bbyclients@linkmarketservices.com.au

Phone: 1300 306 230

Website: www.ppbadvisory.com

ASX (the central clearer)

Contact: ASX Customer Service: 13 12 79

Website: www.asx.com.au/about/information-regarding-bby.htm

For information to assist you if your investment has been adversely affected, please visit Problems with your investments on ASIC’s MoneySmart website.

Taxation inquiries

For any tax-related questions or concerns, please contact the Australian Taxation Office on 131 020.

Trouble with debt

The Trouble with debt page on our MoneySmart website also has information to assist you if you are experiencing problems with debt and cash flow.

Media centre

Receive media releases

Subscribe to the email distribution by sending your name, title, organisation, email address and contact phone numbers to media.subscription@asic.gov.au.

Follow us on Twitter @asicmedia

Last updated: 09/12/2016 02:43