CPT Markets UK, the trading name of UK brokerage Citypoint Trading Ltd, has received approval from the FCA to upgrade its permissions to full scope, “IFPRU €730k” license, according to a regulatory memo seen by Finance Magnates. Citypoint CEO Salam Alaswad confirmed the news.
The variation of permission to the higher license level issued by the City watchdog allows the FX and CFDs broker to trade with its clients as a principal without the matched limitation.
CPT Markets was established in London in 2008, and its upgraded authorization ensures that it adheres to corporate governance, risk control measures, and adequate liquidity levels. The company’s original license from the FCA was for a Limited License – matched principal broker.
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Citypoint Trading, which has been offering FX and CFD products based out of London since it was incorporated in 2008, was acquired last year by Allen Market Limited, a UK based holding company. Since then, it has expanded its workforce, rebranded to CPT Markets UK, and launched a new website.
What does it mean?
IFPRU €730k investment firms (where IFPRU refers to the prudential sourcebook for investment firms) are authorized to deal for own account in any investment instrument. This gives the firm added flexibility without the matched limitations.
Full-scope IFPRU €730k firm status is given to firms based in the UK, with own base funds of €730,000 (roughly $820,00), that must adhere to both the European Securities and Markets Authority’s (ESMA) Markets in Financial Instruments Directive and FCA regulations. Such firms are also subject to IFPRU 11 and are required to submit recovery plans to the FCA on a regular basis.
As Finance Magnates reported earlier, the FCA was considering forcing straight-through processing (STP) brokers to upgrade their licenses to those of full market makers. This is necessary to ensure that the companies manage to cover negative balances resulting from prospective client losses due to unexpected market moves.