Plus500: Further statement regarding Plus500UK’s dialogue with the FCA
Plus500, a leading online service provider for retail customers to trade CFDs internationally, has issued the following statement to respond to recent speculation regarding the current status of Plus500UK’s dialogue with the FCA, in particular in relation to the fact that Plus500UK has “in recent weeks been implementing certain enhanced client on boarding and Anti-Money Laundering processes”.
The Company can confirm that on 9 January 2015, its UK subsidiary, Plus500UK Limited (“Plus500UK”), was required by the FCA under section 166 of the Financial Services and Markets Act 2000 (“Section 166”) (see notes) to appoint a Skilled Person to conduct a review of its Anti-Money Laundering (“AML”) and financial sanction systems and other related regulatory controls. The Skilled Person’s review is normally a confidential process but in light of recent events the Board believes it is prudent to inform the market of the review. In addition to the Skilled Person’s review, on 30 October 2014 Plus500UK provided a Voluntary Requirement (“VREQ”) to the Financial Conduct Authority (“FCA”) whereby Plus500UK was prohibited from conducting all transactions for customers without the appropriate AML documentation.
Following completion of the Skilled Person’s Review, on 15 May 2015 Plus500UK provided a further VREQ to the FCA whereby Plus500UK was required, amongst other things, to prohibit all transactions for existing customers until additional AML documentation had been provided and cease on-boarding any new clients until new AML procedures had been implemented. Plus500UK’s dialogue with the FCA regarding the Section 166 and the VREQs is ongoing.
With regards to progress on onboarding clients, since the announcement on Monday 18 May, Plus500UK has put in place a comprehensive remediation plan to re-enable its currently suspended customers, with approximately 40 staff expected to be working on this process over the coming weeks. Plus500UK continues to re-approve existing customers who have provided the appropriate AML documentation. Regarding new Plus500UK customers, Plus500UK is in dialogue with the Skilled Person about its onboarding process. Whilst it is not currently able to on-board new customers until this process has been agreed, it expects to be in a position to do so within the next few days. In the meantime the Company is able to onboard new customers (including new UK customers) through its regulated Cypriot subsidiary, Plus500CY Limited and Australian customers through its ASIC regulated subsidiary, Plus500AU Limited.
The Company expects to provide a further update by the time of the Company’s AGM, due to be held on Wednesday 27 May.
The Company would like to re-iterate its disclosure from Monday that it paid its final and special dividend of $65 million in full on Friday 15 May and has in excess of $88 million in cash reserves (excluding that held in client segregated accounts).
Gal Haber, Chief Executive Officer, commented:
“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 resource 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.”