The heat is seriously on CFDs operating against the law. Within a very short period, the Financial Conduct Authority (FCA) released two tough-sounding media publications. The releases were stern warnings relating to two ventures that had broken the laws of the United Kingdom regarding financial markets. The regulatory agency issued the notice against a couple of enterprises dealing in online trading products. These were Platinum CFD and STI-Global.
The Illegal Operations
STI-Global focuses on customers in the United Kingdom by giving several offshore investment services. Such services include foreign exchange trading services. However, the city regulator insisted that the claims of registration that was on their online platform are not genuine. As a result, they were not licensed to operate at all in the United Kingdom. The venture stated that it was established n 2011 and had its base in London. There was also a claim of an international office in Hong Kong. STI Global lied on its website when it made the claim that its operations were fully licensed and under regulation by the Financial Conduct Authority (FCA) of the United Kingdom.
The Second Broker
Also, the second broker mentioned was coordinated by Platinum Global Group Limited. It turned out to be a limited liability company that was incorporated in St. Vincent and the Grenadines. Even though this brand did not make the same claim as STI Global that it was regulated in the country, it still had problems. The FCA submitted that it focuses on the citizens via its promotion of dangerous and very volatile trading instruments.
Regulator Sounds Warning
The regulatory watchdog of the United Kingdom is focused on ensuring there is protection and security for consumers. This is security from not just fraud alone but even loss of relatively tiny amounts to regulated brokers. Such brokers are known for having what is referred to as ‘products causing similar harms’.
The Financial Conduct Authority was also thinking that ventures may opt for ways to dodge the regulatory provisions put in place. This they can attempt or execute by making use of their foreign brands or by the sale of similarly complicated or massively-leveraged items. The regulator has said that the pattern of observation is the same as other counterparts in Europe. All the agencies knew what was going on and the products that posed the greatest risks to the consumers and investors too.
Hence, the FCA is thinking ahead so it not be outsmarted in any way. Just last year alone, it released strategies to tackle the marketing of CFDs to retail clients. These provisions were mainly for providers that had the proper license. A similar step had been taken by the prominent European regulatory agency EMSA back in 2018.
The agency did not stop there as it made another move in 2018. There was provision for the coverage of an even greater number of products and services. All these measures are aimed at ensuring that only licensed ventures are allowed to operate and investors can be very sure their investments are in safe hands.