The FCA (Financial Conduct Authority) has prohibited Cyprus-based forex and CFDs operator Finteractive Limited operations, recognized as FXVC, in the UK for various regulatory violations. FXVC is authorized and regulated by the CySEC (Cyprus Securities and Exchange Commission) and is functioning in the United Kingdom under the local financial watchdog’s TPR (Temporary Permission Regime) post the closure of the Brexit deal in December.
FXVC can now no longer provide regulated trading services in the United Kingdom. It has to shut down all open positions and return UK consumer’s funds. FCA, the British financial market regulator, contended that the broker employed a bunch of inappropriate techniques to promote its services. As per the UK regulator, the inappropriate techniques involve misrepresenting financial promotions that seemed to provide consumers with the chance to acquire shares in a famous company and declined to state that they were promoting CFDs.
The regulatory notice issued on Friday said that the FXVC utilized misleading financial promotions. The consumers were not sure about the nature of the investments they were influenced to make. Moreover, the firm adopted pressure tactics, defined by one consumer as ‘relentless,’ to motivate customers to invest ever-increasing sums of money. Additionally, some consumers were even influenced to declare that they were professional investors, despite not satisfying the required criteria for such categorization.
FCA Implemented Similar Bans on Various Brokerages
The FCA has banned FXVC from carrying out any regulated activities in the United Kingdom. It has also asked the organization to conclude all trading positions and repay the money to customers. Professional investors are not limited to the stringent regulatory safety net to the retail traders and can take an antagonistic approach with their investments. This is not the first Cypriot broker to obtain a red flag from the FCA. Previously, the FCA took comparable actions against various brokerages.
The FCA took comparable action against four Cypriot CFD brokers in June 2020. It involves Hoch Capital Ltd trading as iTrader and tradeATF, Rodler Ltd trading as 24option. It also includes Magnum FX Ltd trading as ET Finance, and F1Markets Ltd trading as Investous, StrattonMarkets, and Europrime. That time, the FCA opined that a number of transgressions conducted by each of the firms when it comes to engaging with UK clients, most notably the employment of illegal celebrity endorsements on social media as part of their retailing to UK clients, and the urging consumers into making trades.