Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

FCA fines Xcap Securities for failing to protect client money

The Financial Conduct Authority has fined Xcap Securities £120,900 for failing to protect client money and assets.

The watchdog said this is the first client asset case it has brought under the new penalty regime, which applies to breaches committed from 6 March 2010, and introduces new penalty levels.

The fine represents 2% of Xcap's average client money, plus 0.2% of its average client asset balance over the period of breaches.

The FCA said the new percentage levels are applied based on the seriousness of the breaches and that, under the new approach, it is expected the cases involving breaches of client asset rules will incur 'increased penalties,' compared with the old regime.

Xcap's breaches include failing to properly segregate client money from its own, not maintaining accurate record and accounts and not carrying out accurate client money reconciliations.

Consequently, the risk is that had Xcap become insolvent, clients could have faced difficulties and delays in recovering their assets.

Tracey McDermott, director of enforcement and financial crime at the FCA, said: 'This is the first case that the FCA has brought for breaches of the Client Assets rules using our new penalty regime. 

'The new levels of penalty are expected to result in larger fines, demonstrating the seriousness with which we view these failures and serving as a stronger deterrent to firms.'    

She added: 'We have been very clear about our expectations of firms that have responsibility for investors’ money and safe custody assets.  Xcap failed to meet the required standards from the very outset of its business and continued to have widespread failures for a number of months.'


Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Big City Bright Future

Big City Bright Future

Big City Bright Future, the brainchild of BlackRock, is a three-week work experience programme for school leavers looking to forge a career in the City.

Play Kames' Ennett: Trump good for US high yield, but beware Europe

Kames' Ennett: Trump good for US high yield, but beware Europe

Kames Capital’s head of high yield David Ennett believes the changing political landscape will be a positive for the US, but negative for Europe in 2017.

Play Philip Milburn: why inflation won't run out of control

Philip Milburn: why inflation won't run out of control

Kames bond fund manager views inflation as more of 'scare' than a 'problem' and is positioning his portfolios accordingly.

Read More
Your Business: Cover Star Club

Profile: from Batman Live to commodity beta

Profile: from Batman Live to commodity beta

Charteris may be a family affair, but the company is not at any risk of turning sentimental

Wealth Manager on Twitter