FCA warns the public against a new batch of 26 illegal trading and investment platforms
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The UK is quite strict when it comes to unregistered and unlicensed platforms, and its financial watchdog, the Financial Conduct Authority (FCA), just warned the public against a new batch of such websites. This time, the FCA could identify as many as 26 illegal platforms offering trading and investment services without having the proper licenses.
26 new illegal platforms are trying to attract users in the UK
The majority of the platforms are trading-related, with most of them claiming to offer forex trading services. However, three of them are clones of legitimate firms that the FCA authorizes. The regulator’s warning list noted that the clone platforms include Signaturefunding.org, GLG Partners PL, and Robo-investor. The legitimate companies the clones have been trying to mask themselves include Signature Funding Solutions Limited, GLG Partners LP, and Activtrdes PLC.
As for the remaining 23 illegal platforms that the regulator warned against, they seem to be targeting local traders with financial products and services. These include Tresorfx, Caplita, XIP Capital Groups, Trezo Capital, Bforexpro, Trader Minds, Greenloncl.com, Prime Markets, Fundstradefx, and Growfundsfx.
In addition to them, the FCA also flagged Setupsfxtrading, Global Access FX, Unity Global Bank/Unity Global Banking Group, Ultimosfx, Arrow Solution, BankersGate, Acefinancesystem Ltd, CT Matador, Dolphin Movers, GTSEnergyMarkets FX, FX Global Td. Limited Private Group, and PixPal Pro.
Commenting on the situation, the FCA stated that some of these companies may give incorrect contact details, such as phone numbers, email addresses, and even postal addresses. They could also change these details over time. The regulator believes that the firms might try to trick investors and traders by giving them details to belong to other businesses or individuals, including legitimate trading platforms. That way, the information looks genuine, and the user gets tricked into using their platform.
The FCA is stepping up its market monitoring efforts
Given the number of platforms the FCA has identified, running illegal online trading platforms appears to remain as popular as ever in the UK. Furthermore, the regulator recently reported finding certain gaps in surveillance among CFDs that are provided to users within the country. After investigating the issue, the FCA concluded that companies that offered contracts for difference were not paying enough attention to market abuse risks.
In addition, the regulator found that the companies did not manage to capture the so-called “narrowing the spread,” which is one of the common practices in market manipulation. It happens when traders attempt to influence prices of spread bets or CFDs by placing buy or sell orders of securities with a DMA (direct market access) brokerage. The idea is to narrow the spread of securities in question and affect the execution price of a spread or CFD that were based on them.
Given all the problems that the regulator has encountered, it is working on addressing the shortcomings noticed in retail financial markets by ramping up its supervision efforts. It has created a new set of rules called Consumer Duty, which will increase user protection. The rules are expected to come into effect as of July 31st, 2023.
