The UK’s Monetary Conduct Authority (FCA) has imposed restrictions on the operational license of London Capital Group Ltd (LCG), a retail foreign exchange and contracts for variations (CFDs) dealer owned by the now-bankrupt FlowBank. The restrictions observe the Swiss regulator’s intervention into FlowBank, initiating chapter proceedings in opposition to it.
Actions in opposition to LCG Following FlowBank’s Chapter
“LCG has engaged an impartial agency to ascertain the present monetary standing of the UK entity,” a message on the LCG’s UK web site reveals. “Whereas this evaluation is ongoing, LCG has utilized to the FCA to position sure restrictions on our regulatory permissions.”
LCG is owned by FlowBank, based by former LCG CEO Charles-Henri Sabet. Beforehand, LCG was a part of the London Capital Group Holdings, which encountered bother after delisting from the London Inventory Trade and NEX Trade in 2018. That very same yr, Charles-Henri Sabet, then CEO, purchased LCG, separating it from the troubled London Capital Group Holdings, which went into liquidation.
Sabet made structural adjustments in LCG’s possession after launching Switzerland-based FlowBank in 2020. Final yr, the UK unit of LCG altered its enterprise mannequin, turning into an introducing dealer for IG, as soon as its rival firm.
No Onboarding of Shoppers
In accordance with the FCA’s registry, all restrictions on LCG had been imposed on 13 June 2024, the identical day Switzerland’s Monetary Market Supervisory Authority revoked FlowBank’s license and put the corporate out of business.
The FCA’s actions in opposition to LCG embody restrictions on onboarding new shoppers or introducing any new shopper below its introducing dealer enterprise. Moreover, it can not settle for new shopper cash or perform any regulated actions. Moreover, the regulator additionally imposed asset restrictions on the corporate, prohibiting it from disposing of or diminishing any of its personal property or buyer funds, whether or not within the UK or outdoors.
“As a part of this voluntary association, we’re not at present conducting new regulated exercise,” the discover added on the LCG’s web site. The corporate urges its “legacy shoppers who proceed to carry balances straight” with the corporate to withdraw their funds from the platform.
“Your funds proceed to be held in ring-fenced, designated shopper cash accounts,” LCG famous, including that “In case you are an present shopper of LCG’s Introducing Dealer/Partnership enterprise holding an account with certainly one of our Associate companies, you might be unimpacted by these developments – your account continues to function as regular.”
Aside from the FCA-regulated entity, LCG has one other sister entity licensed within the Bahamas. Nonetheless, that unit doesn’t show any discover of regulatory restrictions.
In the meantime, the bulk shareholder of FlowBank closely criticized the actions of the Swiss regulator, calling it a violation of rights. It additionally highlighted that it might take “all mandatory procedures” in opposition to the regulator, indicating a potential lawsuit.
This text was written by Arnab Shome at www.financemagnates.com.
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