The FCA Warns Against Four Firms in the UK
The Financial Conduct Authority is still working through the coronavirus crisis. FCA issued warnings against three financial platforms in the UK, in addition to a clone of a Swedish firm.
In particular, Parantoux Trading, Investment Supermarket, and Capital Seven were cautioned as unauthorized to offer financial services in the UK. Pentox and Capital Seven are online firms, while Investment Supermarket offers fixed income investments.
The authority also spotted a clone for Swed Bank, an EEA-authorized firm, when it popped up in the UK.
Almost all firms offering financial services or products in the country are required to be authorized by the watchdog. However, the bank was caught selling products and services in the UK without it.
According to the regulator, firms that aren’t authorized are often running scams that lure investors with high returns on investments.
Scammers may give false details or change their contact details over time, such as switching to new email addresses.
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FCA Refused to Ban Short Selling Amid COVID-19 Impact
On Monday, the FCA announced it would not ban short selling temporarily, even amid increased volatility in the market. The regulator explained that short selling volume only makes a small percentage of the total market activity.
Aggregate net short selling activity reported low percentages and even decreased in recent sessions. The authority saw no evidence that it was a significant driver of recent falls in the market.
Furthermore, many investment and risk management strategies rely on both long and short positions. Short selling was dubbed as the foundation of liquidity provision, in which losing it could cause an “imbalance.”
Meanwhile, other European markets banned short selling for the time being. These include France, Belgium, and Italy with volatility impacted by the financial crisis from the novel coronavirus.
FCA defended that major players like the United States haven’t put ban on short selling. The firm claims it is working with top international counterparts in the country and the EU for smooth market activity.
