London Stock Exchange listed broker Plus500 suffered a massive drop in share price today, about 30% as of the time of writing, following an urgent update published by the firm. The broker notified clients that until a satisfactorily anti money laundering (AML) review is carried out, clients will be unable to open any new trades, deposit or withdraw funds.
Plus500’s client onboarding process has been criticized in the past for not requiring proof of address of documents for people to deposit and start trading. Until now the firm defended its fast onboarding process, which uses other automatic verification methods, as complying with AML requirements, but it seems the UK regulators decided differently.
The restrictions and review might have be going on for a while already as some clients of Plus500 notified Finance Magnates that they were having issues with withdrawals since early last week. The delays also caused some clients to turn to social media to complain:
— Leggett (@AaronLeggett9) May 17, 2015
Plus500 also address the issue Friday on its Facebook page:
The Complete Update:
Please Read: Urgent Update regarding restrictions on your Plus500UK Trading Account
What to Look for in a Liquidity ProviderGo to article >>
As an authorised financial institution, Plus500UK Limited has a regulatory obligation to comply with the UK Money Laundering Regulations 2007 and other rules and guidance which requires us – amongst other things – to identify and verify our customers, the nature and purpose of the business relationship and source of funds.
Whilst we understand the inconvenience this will cause, we have no alternative but to place a restriction on your trading account until such time as we have been able to undertake a complete review of the documentation and information we hold currently on you.
Until the review has been satisfactorily carried out, you will be unable to open any new trades on your account, deposit or withdraw funds. If you have any open trades you will, however, still be able to freely service your existing positions with additional Maintenance Margin, although again, will not be able to withdraw funds until the review is complete.
If, during the review of your account, you are required to provide additional proof of address documents, please make sure you follow these guidelines:
The proof of address document must be issued by one of the following: a financial institution, a utility company, a government agency or a judicial authority. Examples include:
- Bank statement or
- Credit card statement or
- Electrical bill or
- Water or gas bill
- Council Tax bill
- Tax letter
(** Please note that a mobile (cellular) bill cannot be accepted.)
The document must:
- Display your exact name and address
- Be not more than 6 months old
- Visible in full
We assure you that, as soon as the review is successfully complete, you will be able to re-commence trading activities, including depositing and/or withdrawing funds.
We value you as a customer and sincerely apologise for any inconvenience caused. Thank you for your patience.