The Financial Conduct Authority (FCA) has imposed a fine of £276,100 on Forex TB Limited (FXTB), a Cypriot contract for differences (CFD) firm. The penalty follows findings that FXTB failed to treat its customers fairly and provided investment advice without proper authorization.

Encouraging Risky Borrowing

FXTB was found to have pressured customers into CFD trading and, in some cases, encouraged them to borrow money from friends or family to invest. Additionally, the firm frequently provided investment advice despite lacking the necessary authorization.

The FCA's investigation revealed that many FXTB customers were inexperienced traders who did not fully understand the risks associated with CFDs. The risks were not adequately explained to them.

Furthermore, FXTB facilitated the process for some customers to become “professional clients” by encouraging them to provide false information. This allowed these customers to forgo protections they would have received as “retail clients.”

🇬🇧 FCA | FCA fines Cypriot CFD firm Forex TB Limited for misconduct

• The FCA has fined Forex TB Limited (FXTB) PS276,100 for customer mistreatment and unauthorized investment advice. • The fine reflects regulatory crackdown on companies not treating customers fairly and…

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Ceasing UK Business

As a result of these issues, the FCA required FXTB to cease providing services to UK consumers on 12 April 2021. FXTB has not conducted any business in the UK since that date. As of 10 October 2023, FXTB no longer holds any FCA permissions.

Initially, the FCA considered imposing a fine of £1.215 million. However, FXTB demonstrated that such a fine would cause serious financial hardship, which led to a reduced penalty.

Finance Magnates reached out to FXTB for a comment on this matter. As of publication, no response has been received.

Therese Chambers, joint Executive Director of Enforcement and Market Oversight at the FCA said: “FXTB’s misconduct was particularly egregious since it relied on the exploitation of customers who, because of their inexperience, were particularly vulnerable. By intervening early in April 2021, we helped prevent further consumer losses.”