The FCA has acted to stop a Cypriot based firm, Finteractive Limited (trading as FXVC), from offering high risk contracts for difference (CFDs) to UK investors.
FXVC used a variety of inappropriate techniques, including misleading financial promotions which appeared to offer consumers the opportunity to purchase shares in a well-known company and failed to mention that they were actually promoting CFDs.
Many of the FXVC’s customers were unclear about the nature of the investments that they were being persuaded to make and the risks involved in trading in CFDs. The firm used pressure tactics, described by one customer as 'relentless', to encourage consumers to invest ever increasing sums of money. Some customers were even encouraged to declare they were professional investors despite not meeting the necessary criteria for such categorisation.
The FCA has stopped FXVC conducting any regulated activities in the UK and required the firm to close all trading positions and return the money to customers.
FXVC operates in the UK under the Temporary Permission Regime (TPR) put in place for firms who used to operate in the UK under a passport and who wish to continue to operate here following the UK’s exit from the European Union. These firms operate under the TPR until their application for full authorisation by the FCA can be considered.
July 2021 update
Finteractive Limited has referred this First Supervisory Notice to the Upper Tribunal where each party will present their respective cases. The Tribunal will consider this and either dismiss it or ask the FCA to reconsider and reach a decision in line with the findings of the Tribunal. The Tribunal’s decision will be made public on its website.