The UK Financial Conduct Authority (FCA) has suspended Cypriot-based broker BDSwiss Holding Plc and all other entities under the BDSwiss Group from offering contracts for differences (CFDs) 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 a great number 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, FCA’s 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 and 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.

BDSwiss’ Response

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.

Katalina Michael, Executive Director and Chief Compliance Officer at BDSwiss, said: “I want to stress that we do not condone such behaviour, as a BDSwiss Group we already had strict partner guidelines in place, and we identified internally and terminated agreements with individual affiliates in the past. We respect the FCA’s decision, following the complaints filed; we have complied with suspending our services and terminating partners operating in the region; and we have also launched an additional internal investigation of our existing network of partners. This incident does not represent the integrity of our operations as a Group, as all our entities maintain full transparency and compliance when it comes to our products and services. BDSwiss Group will continue to work closely with regulators to find the best solution moving forward.”