From Losses to Litigation: client’s lawsuit against broker explained

Introduction A recent court case[1] saw a client of Forex Capital Markets Limited (“FXCM”) looking to recover losses and substantial damages arising from trading oil CFDs in 2020. The case is particularly interesting with Consumer Duty on the horizon and the prospect of brokers facing higher expectations for the standard of care that they provide […]

Market abuse peer review (FCA Market Watch 73)

The UK Financial Conduct Authority (“FCA”) published its latest Market Watch newsletter on 26th April 2023, following a market abuse peer review of firms offering Contracts for Difference (“CFDs”) and spread bets (“CFD providers”). Many of the findings are equally applicable to firms offering other financial instruments. This article provides a summary of the key […]

Change in control: a cautionary tale

A recent supervisory notice highlighted the importance of getting the ‘change in control’ process correct when acquiring a UK financial services firm. It is also a timely reminder for investment firms, authorised payment institutions and E-money firms of the requirements for a change in control[1]. In this article, we highlight the rules and the severe […]

UK cryptoasset regulation

On 1 February 2023, HM Treasury (“HMT”) published a consultation[1] setting out proposals for the UK’s financial services regime for cryptoassets. The UK government has highlighted its ambition to make Britain a global hub for cryptoasset technology. Rishi Sunak previously asserted that “effective regulation” would encourage “the businesses of tomorrow to invest, innovate and scale […]

FCA Consumer Duty ‘Dear CEO’ letters

As firms continue to get ready for the Consumer Duty, the FCA has published a series of ‘Dear CEO’ letters designed to support firms as they progress with their implantation plans. In this article, we focus on the letter addressed to the ‘consumer investments’ sector and the areas that firms should be focussing on in […]

FCA publishes letter to wholesale brokers

The FCA has published a portfolio letter setting out a new strategy for supervising wholesale brokers. The letter notes that periods of sustained volatility since 2019 have heightened financial, credit, liquidity and operational risks. The FCA observed that some firms’ liquidity risk management and stress testing was not fit for the current market environment. The […]

The end of the B book model?

On 1 December 2022, the FCA highlighted continuing concerns about problem firms in the contract for difference (“CFD”) sector. The regulator’s ‘Dear CEO’ letter contained some familiar observations that should come as no surprise to those operating in this market e.g. use of unauthorised marketing affiliates or social media influencers, poor market abuse controls, and […]

The FCA’s largest fine of 2022 – a lesson in regulatory change management

The FCA fined Citigroup Global Markets Limited (“CGML”) £12.6m for failing to properly implement the Market Abuse Regulation (“MAR”). Regulatory change is coming thick and fast for financial services firms, making effective change management controls more important than ever.  Below we look at some of the underlying failures in this case, in the hope that […]