Premier FX issue gets raised before FSCS

Maria Nikolova

“We can certainly have a look at that specific scenario”, says Jimmy Barber of FSCS.

Several months have passed without any updates for customers of collapsed Premier FX, so the FinanceFeeds team was pleased to see that the matter has finally been back on the agenda of regulators.

On July 3, 2019, Caroline Rainbird, Chief Executive Officer, and Jimmy Barber, Chief Operating Officer, Financial Services Compensation Scheme (FSCS) appeared before the Treasury Committee of the House of Commons, to discuss the work of the FSCS.

The list of matters discussed during the meeting included the events around Premier FX (see video 10:25 – Ed.) Let’s recall that Premier FX Limited was placed into creditor’s voluntary liquidation in December 2018.

In its latest update to customers, the Financial Conduct Authority (FCA) said that it was continuing to investigate the business undertaken by Premier FX to determine whether any individuals may have broken the law and whether any money can be returned to customers of the firm.

Premier FX was not permitted to carry on a business of accepting deposits and, if it turns out this is what it was doing, it was doing so illegally, without the proper authorisation. Accepting deposits without authorisation is a criminal offence under the Financial Services and Markets Act 2000.

This matter resurfaced during the meeting held on Wednesday, July 3, 2019. The question was whether someone might be able to make a claim to the FSCS where an authorized institution is acting outside their scope of authorization while holding themselves out as able to undertake the transaction concerned.

The reaction by FSCS’s CEO was to say: “I don’t know the details of what you’re talking about specifically”.

FSCS’s COO added that: “We can certainly have a look at that specific scenario”.

Back in August 2018, the Scheme was pretty straightforward when stating that it will not protect money held with Premier FX. FSCS said back then will not protect money customers held with Premier FX Limited because the firm was not authorised by the FCA to hold customer money in its accounts. This means FSCS will be unable to compensate for any shortfalls in customers’ money held by Premier FX Limited.

We are curious to see whether the Scheme would change its stance on the matter.

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