SVS Securities has collapsed, multiple sources have confirmed.

On the morning of August 2, employees left the company and the company was not allowed to engage in any market activities in public. Apparently, SVS has appointed an administrator and is expected to make an announcement on August 5.

Like Beaufort Securities 18 months ago, this could symbolise another failure for the LSE's Alternative Investment market (AIM). SVS chooses to self-liquidate, which means it doesn't use a third-party custodian to hold clients' shares or money. If the company does go bankrupt, resolving the issue can be a long and complicated process.

It may be too early to fully disentangle what happened to SVS. There are rumours that regulators have stepped in and asked SVS to stop trading. However, it is worth noting that the company's website (https://svssecurities.com) is still running, do not have any announcement.

At the time of Beaufort's collapse, the FCA issued an announcement, the company's website was immediately taken offline, and the public was informed that this was because the regulator was taking action. That's not to say it won't happen this weekend, but it's a sign that this SVS episode may not be as big a deal as the one that took place in Beaufort in March 2018.

In any case, this is not good news for AIM.

The market eventually needs more liquidity to get out of it. Times are already tough, and the failure of SVS again makes them worse. We need to wait for official confirmation from SVS, but this will obviously affect client assets. The Beaufort bankruptcy dealt a fatal blow to the clients involved, and the professional clients ended up suffering huge losses as the administrators needed their funds to pay off the company's debts. People protected by the FSCS (Financial Services Compensation Scheme) have been paid out on their assets, but they have had to wait more than eight months. If SVS does fail, we may see a repeat of this tragedy, only worse than Beaufort.

Investing in 2017 was like shooting fish in a barrel, and making money was so easy that when Beaufort went bankrupt, it was still exciting. However, things are different now.

While SVS is nowhere near the size of Beaufort, its failure could still have a profound impact on the market, it just hasn't happened yet. More information may emerge on Monday, but if SVS does go into administration, a significant amount of trading assets may not be available.