Information for customers of Premier FX Limited

25 February 2021 update:

Since publishing the statement below, we have publicly censured Premier FX for failing to safeguard its customers’ money and for misuse of its payment accounts. See our press release for more information.

What happened to Premier FX

On becoming aware of the difficulties facing Premier FX, we placed requirements on it to cease all regulated payment service activities and not to dispose of its assets. In addition, we applied to the Court to have the firm placed into administration.

On 13 August 2018, on the application of the FCA, the High Court appointed Peter Hart and Dina Devalia of PKF Geoffrey Martin & Co as joint administrators of Premier FX. The FCA took action to apply to the Court for the insolvency of Premier FX because, following the death of the sole director and shareholder, the firm was not able to pay its debts as they fell due and was cash flow insolvent.

We are continuing to investigate the business undertaken by Premier FX to determine whether any individuals may have broken the law and whether any money can be returned to customers of the firm.

Current status of Premier FX

Premier FX has moved into creditor’s voluntary liquidation. Jonathan David Bass and Freddy Khalastchi of Menzies LLP were appointed as joint liquidators of Premier FX on 7 December 2018 and are responsible for managing customer claims against the firm. PKF Geoffrey Martin & Co and have provided all Premier FX’s books and records to Menzies LLP including correspondence received from creditors regarding their claims.

Customers who want to contact the firm to discuss their accounts can do so by emailing [email protected], by contacting 02920 447 514, or by writing to:

Menzies LLP
Lynton House
7-12 Tavistock Square
London
WC1H 9LT

The FCA’s role in supervising Premier FX

Many firms such as Premier FX provide both regulated and unregulated services to consumers. Premier FX is authorised by the FCA to perform the regulated payment service activity of money remittance. The provision of payment services (such as money remittance) is a regulated activity under the Payment Services Regulations 2017 (PSRs). The FCA is responsible for granting UK firms permission to undertake payment services and firms are either ‘registered’ or ‘authorised’ by the FCA depending on the size of their business activities.

Money remittance is a service for the transfer of money, without any payment account being created in the name of the customer and where the funds are received for the sole purpose of transferring a corresponding amount to a third party. FX activity in which a firm buys one currency with immediate effect (known as a ‘spot’ contract) from a customer and pays the customer with another currency does not require FCA permission and is therefore unregulated. FX activity which involves a derivative such as an option or a contract to purchase in the future would require permission under the Markets in Financial Instruments Directive (MiFID2), unless the FX falls within an exclusion.

Once a firm is granted permission, the FCA is responsible for supervising the regulated activities of that firm. Our approach to individual firms depends on their size, activity and potential harm to consumers. More information on how we supervise firms can be found in our Approach to Supervision document.

Was Premier FX authorised to accept deposits?

No. ‘Accepting deposits’ is a regulated activity under the Financial Services and Markets Act 2000 (FSMA), which is generally the activity of holding funds which can earn interest and be lent to others. Banks, building societies and credit unions are deposit takers. Premier FX, conversely, is a payment institution and does not have permission for accepting deposits. We are aware of allegations that suggest Premier FX was accepting deposits which if substantiated would represent activities outside of the scope of the firm’s permission and be unlawful.

In providing money remittance services, a firm like Premier FX can only hold funds for the purposes of a payment transaction to a third party. These funds must also be accompanied by a payment instruction for onward forward transfer. A payment institution cannot hold funds indefinitely and can only hold funds for a payment transaction, which distinguishes it from a deposit taker.

Will I get my money back?

Any client who paid money to Premier FX but whose money was not sent to the recipient in accordance with the client’s instruction, will have a claim against Premier FX. The joint liquidators will assess the money available to reimburse claims made. Any customers who have not yet made a claim should do so using the joint liquidators contact details above.  

Why the Financial Services Compensation Scheme (FSCS) does not apply

FSCS protection does not apply to firms authorised or registered by the FCA to provide money remittance services under the Payment Services Regulations 2017. 

What we mean by safeguarding

Under the PSRs, there are rules to protect customer’s funds in the event of a firm’s insolvency. This is known as ‘safeguarding’. It is important to note that safeguarding protections only apply to funds that have been received for payment services.

Do I need to use a third party to get my money back?

We are aware that some companies have been approaching customers of Premier FX, offering to help them recover their money. You should proceed with caution if you are approached by one of these companies. For the vast majority of Premier FX’s clients, there is no benefit in involving a third party in making a claim.

If you believe you are owed money by Premier FX, or have any questions about the liquidation process, please contact Premier FX’s joint liquidators using the contact details above.

Next steps

Premier FX’s joint liquidators, Menzies LLP, were appointed on 7 December 2018 and are responsible for managing customer claims against the firm. Any customers who have not yet made a claim should do so using the joint liquidators’ contact details above.

The joint liquidators are preparing an application for the Court to decide various matters relating to the beneficial ownership of the monies held. This includes a request for the Court to approve the liquidator’s proposed use of some of the remaining monies to pay for further investigations into the beneficial ownership of these funds.  The Court hearing was postponed due to Covid-19 and is now scheduled for November 2020.

We continue to investigate Premier FX and remain committed to identifying what has happened to customers’ money that was held by Premier FX. Premier FX was not permitted to carry on a business of accepting deposits and, if it is confirmed that this is what it was doing, it was doing so illegally, without the proper authorisation.

Accepting deposits without authorisation is a criminal offence under the Financial Services and Markets Act 2000, and also means that consumers are denied appropriate protections. These include the detailed vetting and scrutiny that would have been carried out by the Prudential Regulation Authority and the FCA, sufficient levels of regulatory capital to undertake deposit-taking, supervision as a deposit-taker and deposit protection under the FSCS in the event of failure. All of these protections are missing when a firm carries out a deposit taking business without permission. If Premier FX had sought our consent to carry out deposit taking, we would not have given it.

We have been reviewing Premier FX’s bank accounts and tracing the funds in question as a matter of priority. The tracing exercise is complex and involves reviewing a large number of transactions across Premier FX’s 73 bank accounts that took place over the course of several years, in a range of currencies and through a number of overseas bank accounts that we have identified. We are speaking to relevant witnesses, and using our powers to compel answers to speed up this process as much as possible. We are also assisting the liquidators and we will provide updates to the creditors’ committee and the wider body of customers as best we are able to, subject to our statutory obligations of confidentiality.

The affairs of Premier FX are not easy ones to unravel as the business was controlled by the late Peter Rexstrew and the firm’s records do not fully explain its affairs. Many of the witnesses we have spoken to so far indicate that Mr Rexstrew was the only person they dealt with in relation to their money and we are no longer able to obtain his explanation of how Premier FX treated customers’ money. Despite these challenges, we are very conscious of the position that customers find themselves in and we are equally committed to doing what we can to provide them with certainty as soon as possible.

Whilst we know that customers are keen to receive details on the progress of our investigation, we can only provide limited information whilst the investigation is ongoing. We will publish further updates on our website if and when it is appropriate to do so.

Page updates

25/02/2021: Information added Box at top of page to link to more recent press release