Parliamentary questions about SLPs, often concealing binary options fraudsters, pile up

Maria Nikolova

The questions about the enforcement of penalties against Scottish Limited Partnerships that fail to comply with the new transparency requirements come to the fore.

Shortly after Margot James, Conservative MP, had to respond to queries about the number of Scottish Limited Partnerships (SLPs) that responded to the new transparency requirements, more questions have been raised around the government response to the activities of such entities, often fronting for binary options firms.

The new regulations – Scottish Partnerships (Register of People with Significant Control) Regulations 2017, aim to bring SLPs into line with others in the UK, as they now have to disclose the identity of their beneficial owners within 28 days. In case the partnerships fail to comply, they will face daily fines of up to £500.

As per earlier statements by Margot James, however, approximately 28,100 Scottish Limited Partnerships failed to supply statements of Persons of Significant Control by the deadline given in the regulations. She added that there are approximately 33,000 SLPs registered with the UK Companies House. All registered SLPs are eligible under the terms of the Scottish Partnerships (Register of People with Significant Control) Regulations 2017.

On Tuesday, Dame Margaret Hodge, Parliamentary, House of Commons, asked the Secretary of State for Business, Energy and Industrial Strategy, how many Scottish Limited Partnerships have been fined since the People with Significant Control register came into force. Another question is if the Secretary of State for Business, Energy and Industrial Strategy will list those UK-based Trust and Company Service Providers which have incorporated more than 20 Scottish Limited Partnerships.

Dame Margaret Hodge’s questions now await an answer.

Apparently, the effect of the new regulations is not obvious and there are concerns that the rules will allow the status of SLPs to be abused by fraudulent entities.

FinanceFeeds has reported that SLPs are often used by binary options fraudsters thanks to the special status of such partnerships. Before the coming into force of the new regulations, SLPs had been allowed not to disclose the identity of their owners and to file no accounts.

A recent report by the Scottish Herald has estimated that 43 Scottish shell companies act as corporate fronts for binary options sites. Of these, 41 are Scottish limited partnerships.

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