Financial Conduct Authority
Temporary Permissions Regime – FCA issues supervisory notice to Finteractive Ltd – 16 April 2021
The FCA has published a supervisory notice issued to Finteractive Ltd (FXVC), an investment firm registered in Cyprus, barring it from continuing to offer high risk contracts for difference (CFDs) to UK customers.
FXVC enables consumers to trade CFDs using an online platform, accessible through its website. Since February 2019, the FCA has received almost fifty complaints about FXVC’s activities. The FCA found that FXVC has used a variety of inappropriate techniques, including misleading financial promotions and encouraging users to wrongfully declare they were professional investors.
The FCA considers that FXVC breached its obligations under the MiFID II Directive (2014/65/EU), as well as breaching Principles 6 and 7 of its Principles for Businesses and rules in Chapters 3 and 22.5 of the FCA’s Conduct of Business Sourcebook (COBS). FXVC has been banned from conducting any regulated or market activities in the UK, and it has been required to close all trading positions and return the money to customers.
FXVC was operating in the UK under the Temporary Permissions Regime (TPR) which was put in place for firms that used to operate under an EEA passport and wished to continue to operate in the UK following the end of the Brexit transition period.
FCA Supervisory Notice
FCA Press Release
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Extended warranty insurance policies – FCA censures broker – 20 April 2021
The FCA has published a final notice issued to Alsford Page & Gems Ltd (APG), a wholesale and reinsurance broker, for failings related to selling extended warranty insurance policies to retail customers in breach of Principles 3 (management and control) and 6 (customers’ interest) of its Principles for Businesses.
APG’s business is wholesale and reinsurance broking within the Lloyd’s of London insurance market, and it began selling extended warranty insurance to retail customers in 2013 via appointed representatives. The FCA found that, between February 2013 and March 2016, APG’s systems and controls for selling products to retail customers were wholly inadequate and its oversight of its appointed representatives was limited and ineffective. These weaknesses meant that APG had no assurance that its customers were being treated fairly or had the appropriate level of information about the products they were purchasing.
APG agreed to pay compensation totalling £399,902 to customers who purchased extended warranty issuance policies from the appointed representatives during the relevant period. The compensation was equivalent to the brokerage fees that APG made from selling the policies.
In a related press release, the FCA stated that it is seeing increasing examples of this type of misconduct, often as a result of principals’ failure to oversee their appointed representatives appropriately. As a result, the FCA is working to address these issues by carrying out greater scrutiny of firms as they nominate appointed representatives, implementing a range of targeted supervision in high-risk sectors and considering whether rule changes may be required.
FCA Final Notice: Alsford Page & Gems Limited
Press Release
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Fraud and unauthorised business – FCA commences criminal proceedings - 22 April 2021
Following an investigation, the FCA has announced that it has commenced criminal proceedings against Larry Barreto and Tassib Hussain for conspiracy to commit fraud by false representation and carrying out regulated activities without authorisation.
Mr Barreto traded as Barreto and Partners, an unauthorised financial services firm, and Mr Hussain is an accountant who ran Keystone Chartered Accountants. Both defendants were involved in falsifying self-employment and employment documentation to support mortgage applications for Mr Barreto’s clients who did not have sufficient income. Mr Barreto also provided advice in relation to regulated mortgage contracts without authorisation to do so.
The plea and trial preparation hearing is scheduled for 19 May 2021.
FCA press release on criminal proceedings for fraud and unauthorised business
