View more on these topics

FSA fines foreign exchange broker £85k

The FSA has fined foreign exchange broker ActivTrades Plc £85,750 for failing to adequately ring-fence client money from the firm’s money.

Under the FSA’s client money rules, firms are required to keep client money separate from the firm’s money in segregated accounts with trust status.

Between April 14 2009 and September 2 2010, the amount of client money held by ActivTrades ranged between £3.4m and £23.6m and averaged £12.2m.

ActivTrades failed to ensure that this money was fully segregated, which put client money at risk should the firm become insolvent.

ActivTrades’ failures were discovered as part of an FSA thematic review into the management of client assets and money held by firms.

Based on the review’s initial findings, the FSA required ActivTrades to engage a skilled person to review its client money arrangements. The skilled person’s report highlighted that, on several occasions, client money was mixed with ActivTrades’ funds.

Between January 29 2010 and June 14 2010, client money totalling €800,000 was held in an account used for ActivTrades’ own funds, which meant that it was not adequately protected.

The skilled person’s report also identified a number of other serious failings including failure to perform client money calculations accurately and failure to pay interest on client money. ActivTrades was also unable to monitor and assess the adequacy of its client money arrangements due to weaknesses in information given to senior management.

FSA director of small firms Linda Woodall says: “It is essential for firms to adhere to our client money rules and our recent action in this area shows our continuing focus on the importance of managing and protecting client assets adequately.

“Ensuring the necessary client money safeguards are in place is a key element of consumer protection, and firms of all sizes must ensure that any client money they hold is properly segregated.”


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. What a shame they didn’t pick up Crown Currency Exchange on the same grounds. It may have helped the 000’s who will be left with little to nothing due to the lack of regulation these type of companies receive.

  2. Well done, the Canary Wharf bully boys. Did anyone lose any money? Why don’t the bully boys go and find somewhere else to use their talents such as Japan?

  3. What a shame that CCE never had a Part IV permission and so was never subject to regulation… Do at least TRY to understand the system you’re bitching about

  4. This is the problem, too many gaps that consumers don’t know about. Rightly or wrongly they think if it is money related it is regulated.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm