Brokerage News: Plus500 fined £205,128

It has come to my attention that on the 17th of October 2012 Plus500 were fined £205,128 for breaches of FSA regulation. The fines were for breaches of two different pieces of FSA regulation. The statement by the FSA is as follows: 

‘With effect from 17 October Plus500UK Ltd were the subject of a Final Notice in respect of breaches of SUP 17 and PRIN 3 and fined £205,128. The breaches involved a failure to report to the FSA reportable transactions in timely and accurate manner. For further details please contact Ken O’Donnell on 0207 066 1374 or Neil Gamble on 0207 066 1884.’ 

SUP 17, is part of FSA legislation which requires that regulated firms report certain financial transactions to the regulator. This piece of legislation is lengthy and detailed with it not being clear where exactly Plus500 slipped up. For example the opening of each CFD position must be reported in a timely manner to the FSA in the correct format including various details in accordance with SUP 17 Annex 1. It appears the Plus500 were given several warnings regarding the slow reporting of such details. With the new regulations requiring that all re-portable transactions are reported by the close of that business day. After their behavior was not modified and improved they were given a fine. 

It has been reported that Between 29 June 2010 and 5 November 2011 a total of 1,332,000 reportable transactions were undertaken by Plus500. Plus500 failed miserably failing to report any of these transactions accurately and further failed to report 189,000 of them at all. This is quite shocking and Plus500 are the first regulated firm to punished under the new punishment policy.

PRIN 3, stands for Principles 3 it seems that this behavior of Plus500 was deemed to be in breach of the general principles of the FSA. Which is probably why Plus500 were given such a large fine, however no further disciplinary action was taken against Plus500. Plus500’s fine was reduced by 30% as they co-operated fully with the FSA’s investigation. The severity of the fine suggests that Plus500’s breaches were considered to be quite severe, significantly decreasing Plus500’s overall reputation.  

Full details of the FSA’s ruling can be found here.

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