Plus500 Trading Resumes, Reveals FCA Dialogue over Anti-Money Laundering

Plus500 trading is back online Friday, following a suspension earlier this morning - the broker revealed a dialogue with the

Plus500 Ltd (LON:PLUS) traders almost found themselves facing an early weekend, following the suspension of trading earlier today of the stock on the London Stock Exchange (LSE), before trading ultimately resumed during the afternoon session at 13:15 London time.

The LSE issued a statement of Plus500’s share trading at 10:15 London time earlier today, after heavy volatility was experienced throughout the morning. The company’s stock closed at 750p last Friday, which now seems like ancient history – since then, share prices have capitulated below the 250p handle, striking a daily and 52-week low at 227p before key positions triggered and the price rebounded back up to 275p, as trading suddenly ceased.

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Indeed, Plus500’s share prices are painting an increasingly negative picture, despite a regulatory filing earlier this week showing Odey Asset Management as a buyer of shares yesterday, increasing their stake by 1,605,000 shares to a 14.09% stake in the online CFD and forex broker.

Initial rumors for a time touched on the lack of a dividend statement as a likely culprit for the recent downturn, however, even the most disgruntled dividend-focused shareholders are growing increasingly concerned given the manifestation of such an abrupt -63.3% collapse WoW.

Regarding the recently speculated status of Plus500UK’s dialogue with the UK’s Financial Conduct Authority (FCA), Plus500 reiterated, “In recent weeks it has been implementing certain enhanced client on boarding and Anti-Money Laundering (AML) processes.”

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Moreover, Plus500 confirmed that back on January 9, 2015, its UK subsidiary, Plus500UK Limited, was required by the FCA under section 166 of the Financial Services and Markets Act 2000 to appoint a Skilled Person to conduct a review of its AML processes and financial sanction systems, in conjunction with other related regulatory controls.

Under section 166 of the Financial Services and Markets Act 2000, the FSA is eligible to require an authorized firm to provide a report on any matter required by the FSA or the provision of information. Subsequently, the appointed person must detail a report to be nominated or approved by the FSA and be deemed suitable by the respective Authority to make a report on the matter concerned.

As such, consequent to the Skilled Person’s review, after being warned on October 30, 2014, Plus500UK provided a Voluntary Requirement (VREQ) to the FCA, whereby Plus500UK was prohibited from conducting all transactions for customers without the appropriate AML documentation.

According to Gal Haber, Chief Executive Officer, Plus500, in a recent statement on the trading suspension, “Plus500UK customers can rest assured that we are doing everything in ‎our power to resolve the current issues. Customer balances are protected in segregated accounts with major international banks and we are mobilising significant resources to complete the verification project.”

“Shareholders can also rest assured that we are doing everything ‎in our power to protect our UK market position and we are in close dialogue with the FCA. The current situation is regrettable, and we apologise to customers whose accounts are frozen; we intend to resolve these issues within as short a time as possible. We will update customers and shareholders with the progress being made over the coming days and weeks,” he added.

In the aftermath of the announcement the company’s shares have not stopped declining, hitting their lowest level since November 2013 at 200 pence per share, which was down almost 50% on the day.

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