FSCS says it will be able to protect customers of online brokerage FIXI
The compensation scheme says it will be able to protect those eligible claimants whose money has not been returned.
The UK Financial Services Compensation Scheme (FSCS) has just published an update in the case of FIXI plc, an online brokerage that was placed into liquidation on May 31, 2019.
FSCS says it will be able to protect those eligible claimants – individuals and small businesses – whose money has not been returned. The body has reached this decision because of the type of investment, and because of the way the investment was held. The Scheme can cover client money shortfalls for eligible customers with valid claims up to its compensation limit of £85,000.
Let’s note that you could claim compensation with FSCS if you meet all the following criteria:
- The financial services firm you did business with has failed and is unable to return your money itself (the company is ‘in default’). In the case of FIXI, the firm was declared in default on August 30, 2019.
- The FCA or PRA authorised the firm under FSMA to carry out regulated activities at the time you did business with it.
- The firm owes you a civil liability (e.g. negligence) in connection with a regulated activity that FSCS covers (e.g. advising on designated investments).
- You have suffered actual financial loss as a result; and
- You’re a private individual (although some businesses and charities may be eligible, depending on the type of claim).
FSCS is working with the liquidators to put together a process for returning funds and hopes to be in a position to start returning money very soon.
FIXI was an online brokerage providing trading platforms to professional, institutional and retail clients since its incorporation in 2005, which included providing its clients with market access to foreign exchange (FX), contracts for fifference (CFDs) and financial spread betting.
On December 20, 2018, FIXI voluntarily agreed to have its regulatory permissions varied (VREQ). FIXI agreed not to conduct any regulated activities without the prior written consent of the Financial Conduct Authority (FCA). The FCA also instructed FIXI to close all open trading positions.
On May 1, 2019, a board meeting of the Directors decided to place FIXI in liquidation.