The UK Financial Conduct Authority (FCA) has banned Cypriot-based broker, BDSwiss Holding Plc and all other members of the BDSwiss Group from offering contracts for differences (CFDs) instruments to UK investors.
Announced on Thursday, the financial markets regulator, alleged that although one of the BDSwiss subsidiaries is regulated in the United Kingdom, the group has onboarded 99 percent of UK investors through overseas entities. These entities have the required permission to operate in the UK or take UK investors as clients.
“This group was selling high-risk investments to UK investors in breach of our perimeter and the rules for CFDs we have put in place to protect retail investors,” Sarah Pritchard, FCAs Executive Director of Markets, said.
The broker has been ordered to stop its services in the UK and close all trading positions and return the money to customers.
The BDSwiss Group operates multiple brokerage brands: BDSwiss, Swissmarkets and BDS Trading. It holds multiple licenses which include ones from the regulators in Cyprus, Mauritius and Seychelles. According to the FCA, BDSwiss is trying to build legitimacy in the entire group with the one UK-regulated entity.
Additionally, the UK regulator flagged the broker group for its practice of sales and marketing, alleging that it ran misleading promotional campaigns with promises of unrealistic returns. Moreover, the watchdog alleged that ‘numerous UK consumers have lost significant sums of money’ because of the promotions of BDSwiss and its affiliates on social media.
Responding to the FCA‘s notice, BDSwiss told Finance Magnates that it was not given any notice and was not made aware of specific client complaints filed with the FCA. But, now it is ’in close communication with the regulator.
“The BDSwiss Group accordingly suspended all promotional, marketing and onboarding activities towards UK audiences back in mid-July, and after giving clients a proper notice period we proceeded to terminate existing UK accounts. BDSwiss is also in the process of submitting a revised written representation statement to the FCA by August 12, 2021,” the broker stated.
Furthermore, it pointed out that an isolated group of its Partners might have intentionally breached their agreements for marketing measures. “We do not condone such behaviour and have already identified and terminated our agreements with these individuals,” BDSwiss added.