FCA Says UK’s City Credit Has Entered Insolvency
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City Credit Capital (UK) Limited (CCCUK), a brokerage platform dealing in forex and contracts for difference (CFD) offering, has become insolvent. The UK financial market regulator, the Financial Conduct Authority (FCA) revealed that the broker was now into bankruptcy administration.
UK’s City Credit enters bankruptcy administration
The FCA released a statement saying that it would work with Begbies Traynor LLP and AABRS Limited as the joint administrators of City Credit. The process will be spearheaded by Gary Paul Shankland and Jamie Taylor from Begbies Traynor and Christopher Andersen from AABRS Limited.
The FCA has said that the decision comes after an application for administration by directors at CCCUK. The FCA website shows that this brokerage platform offers online dealing services targeting private investors, banks, institutions and brokerage platforms. The FCA register also says that CCCUK operated as CIX Markets and Markets Trader.
The FCA statement said, “On 20 June 2023, we took action to prevent CCCUK from carrying on any regulated activities by placing restrictions on its permissions. CCCUK was also required to preserve its client money and place a notice on its website informing clients that it was no longer permitted to conduct regulated activities and that all client positions would be closed.”
On June 20, 2023, the FCA entered bankruptcy administration that imposed restrictions on CCCUK permissions to bar the platform from conducting regulated activities. The FCA has also demanded that the company preserves client funds.
The FCA ordered that CCCUK place a notice on its website informing its clients that it was no longer authorized to offer regulated activities. The regulator further said that all client positions at the firm would be closed.
The website of CCCUK currently features a message saying that the firm was no longer operational. The website also has a frequently asked questions (FAQ) section where the CCCUK has said that the joint administrators need to offer an eight weeks timeline including the expected returns to creditors and the reason why the firm entered into bankruptcy administration.
CCCUK’s financial results
The CCCUK published its financial results for the financial year ended December 2021. The results show a 41% drop in margin-in compared to the performance that was reported by the company during the previous financial year.
The margin-in metric is used to assess the profitability of a company by assessing the difference between the selling price of a product and the cost of production.
During the financial year that ended on December 31, 2021, the group posted a loss. At the time, the global economy suffered a blow because of the effects of COVID and several government strategies that were imposed to manage the pandemic.
Last year, the company filed a report with the UK Companies House. In this report, the company said that if losses will continue to be reported without any additional capital being deployed, the company might breach the requirement for regulatory capital resources, which will result in supervisory action by the FCA.
