FXVC Ordered to Stop Offering CFDs in the UK

FXVC, a trading name of Finteractive Ltd, the Cyprus-based forex and CFDs operator, has been ordered by the Financial Conduct Authority (FCA) to stop offering CFDs to UK customers because of using inappropriate promoting techniques.

The UK watchdog detailed that FXVC, among other inappropriate techniques, has misled 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.

According to the FCA, 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 in the country 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.

The FCA had followed ASIC's lead in tightening rules on CFD products back in 2016 and confirmed permanent restrictions on the sale of CFDs and CFD-like options to retail consumers in July 2019. In addition to CFDs, the UK regulatory body has also imposed a ban on crypto derivatives retail trading within its jurisdiction, which forced Bybit, a popular cryptocurrency exchange based in Singapore, to shut UK operations, as Fazzoco reported last month.