UK’s FCA Shuts down Finteractive for Trade Rules Violations
The UK Financial Conduct Authority (FCA) has ordered Cyprus-based brokerage firm Finteractive Limited to cease its operations in the UK. According to the FCA, the order follows multiple regulatory violations by Finteractive Limited, also formerly known as Tradename FXCV.
Up until the FCA notice, Finteractive was piloting its trading services to the UK via the CySEC license. The firm was also operating under the Temporary Permission Regime (TPR) since the Brexit deal closure in December.
All its services including Contracts for difference (CFDs) will henceforth be unavailable to UK-based traders. The FCA requires Finteractive to close all its open positions and refund pending deposits to its clients.
FCA Accused Finteractive of Evading Regulations
According to the British financial regulator, Finteractive used various inappropriate techniques to market its products. The firm allegedly lured customers and sold CFDs deceptively packaged as opportunities to buy shares of a well–known company.
Furthermore, Finteractive used misleading financial promotions, leaving customers uninformed about what kind of products they were buying. Another tactic the broker used was to employ pressuring tactics to persuade customers into rush decision making.
“The firm used pressure tactics, described by one customer as relentless, to encourage consumers to invest ever-increasing sums of money.”
The FCA also noted in the official notice that Finteractive violated several local trading rules. The firm is said to have encouraged certain customers to falsely declare themselves as professional investors, despite lacking the qualifications.
The FCA said that was a direct violation since professional traders have to be registered under a different categorization. Additionally the firm could take advantage of some of the trading allowances available to professional traders. Retail traders with less trading experience are often protected from risky trading investments by the law.
FCA Continues To Crackdown on Law-Breaking Brokerages
This is not the first time for Finteractive Limited to receive a warning from the FCA. Earlier FCA news indicates that the watchdog has blacklisted other firms for violating trading rules especially to retail traders.
Earlier in March, the FCA imposed a few restrictions on brokerage firm Dolfin Financial (UK) for gray area trading activities. The FCA expressed concerns about how the firm was conducting its Tier 1 investors business and financial crime controls.
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