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FCA renews ban on DFM Stargate

The FCA has renewed its suspensions on discretionary fund manager Stargate Capital Management.

The regulator first told Stargate it could not take on any new appointed representatives back in June. The FCA has also continued its ban on new investments into the firm’s FX Perpetual fund, an “absolute return systematic algorithmic FX trading strategy” and fellow foreign exchange linked fund Momentum.

While Stargate will be allowed to carry on managing the Catalyst range of enterprise investment schemes, it is banned from managing any other unauthorised investment funds.

Catalyst Investment Group was also sanctioned by the FCA in 2016, as chief executive Timothy Roberts was fine nearly half a million pounds for misleading investors over bond issues.

According to the FCA’s latest notice, Stargate was operating from a director’s home address and not its place of business listed on the FCA register. The firm had also not informed the regulator about other changes to directorships at Stargate. Under a visit from the FCA, the regulator says the firm was not able to document its capital adequacy or basic risks to its business.

Stargate acknowledged in July that is was unable to provide “adequate documentary evidence of its governance over its appointed representatives”.

Stargate has argued that it has since put in place monitoring processes, but the FCA believes these are still inadequate.

While a director told the FCA that he had communicated with appointed representatives, calls and meetings were not documented. Due diligence is described by the FCA as “tick-box”, with new appointed representatives only requiring a passport photo, Companies House documentation and a council tax bill.


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