The British supervisory agency, the Financial Conduct Authority (FCA), issued a warning against the forex and CFDs trading platform, FX Globe International as the broker is taking UK clients without any local license.
“We believe this firm may be providing financial services or products in the UK without our authorization,” the FCA stated.
The warning is specifically against the Vanuatu-registered entity of the broker, FS International Ltd, that is operating with the off-shore license in several developing countries.
“FS international Ltd is not licensed either by JFSA and/or from any European supervisory authority; Thus it is not involved with any acts considered to be offering financial products and solicitation for financial services to Japan or in European Union member states,” the website of the broker highlights.
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An FCA License Is Mandatory
Within the European Union, the broker operates with a Cypriot license. However, the FCA warning does not mention anything about the Cypriot entity. Though now EU brokers need a mandatory FCA license to operate in the UK after Brexit, some EU brokers are still operating in the country under a temporary regime.
“This firm is not authorized by us and is targeting people in the UK. You will not have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if things go wrong,” the FCA added.
Earlier, the British watchdog flagged a few other EU brokers and blocked their services in the country for taking the UK traders under offshore entities. A recently published report found that this is a common phenomenon as they use introducing brokers (IBs) and affiliates to promote the services under international entities.