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  Affiliates Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition The broker pays only for the clients which end up opening an account. The affiliate marketer doesn’t get any compensation unless the lead ends up depositing. After the acquisition the broker kicks back a predetermined amount to the affiliate. The figure can be fixed or a percentage of a customer’s deposit.This is where CPC or Cost per Clicks come into play. This option is used to drive traffic to the broker’s website. The affiliate is getting paid regardless of whether the client ends up opening an account. Nowadays, this option is rarely used howeverIn the FX space, it is certainly possible to be successful affiliate marketer. However, you need to utilize websites with requisite levels of traffic. For many brokers, affiliate marketing is not their primary source of revenue as the results can be unpredictable and sporadic. Affiliates serve as an essential component of a broker’s client acquisition tactics and marketing. One of the most important functions of affiliate marketers is the sending of leads to the broker, which are directly opening an account or visiting the broker’s website. There are several ways in which brokers are compensating affiliates based on the number and type of clients they refer to the company and whether or not or how much they end up depositing.Understanding CPA or Cost Per Acquisition The broker pays only for the clients which end up opening an account. The affiliate marketer doesn’t get any compensation unless the lead ends up depositing. After the acquisition the broker kicks back a predetermined amount to the affiliate. The figure can be fixed or a percentage of a customer’s deposit.This is where CPC or Cost per Clicks come into play. This option is used to drive traffic to the broker’s website. The affiliate is getting paid regardless of whether the client ends up opening an account. Nowadays, this option is rarely used howeverIn the FX space, it is certainly possible to be successful affiliate marketer. However, you need to utilize websites with requisite levels of traffic. For many brokers, affiliate marketing is not their primary source of revenue as the results can be unpredictable and sporadic. Read this Term 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  Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others. In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others. Read this Term 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."