Regulators launch probe into LCG’s regulatory fees

LCG has until July 11 this year to reply to a regulatory query about the amount of regulatory fees paid by the firm.

london

All publicly listed companies on the London Stock Exchange are required by law to report material events and, if a financial institution, regulatory and administrative matters in the public domain, via the RNS, which stands for Regulatory News Service.

The Regulatory News Service is what really counts as proper and reliable disclosure for market-sensitive news for all companies that are listed on London’s prestigious venue.

Today, LCG once again steps into the news, however this time it is a regulatory reporting matter that is the subject, rather than its continual and gargantuan quarterly losses, or the hiring or exodus of senior executives which has become a common feature within the firm’s operations since its change of ownership in 2014.

The company has reported that it has received a query from a regulatory authority with regard to the level of regulatory fees that are being paid by LCG, and that LCG is currently evaluating this query and has to reply to the regulator on July 11, 2016, indicating that not enough has been paid.

As far as the Financial Conduct Authority (FCA) is concerned, the amount chargeable to firms under its jurisdiction depends on the type of regulated activities the firm carries out, which are known as ‘fee blocks’,the extent of the firm’s activities (amount of business undertaken), and how much it costs the FCA to regulate these types of activities.

The FCA invoices companies between July and September each year, issuing a single invoice covering the required FCA fee plus fees and levies for any other regulatory organisations, as appropriate.

Where total fees exceed £50,000 in the previous year, the FCA invoices for 50% of that fee in April, this being called the ‘on account’ fee.

Whilst this particular report does not stipulate which regulatory authority has made this query, it is worthy of note that LCG is regulated solely by the FCA and has its entire operations in London.

In the beginning of 2015, LCG’s losses ran at approximately £7 million for the first quarter, by the end of the year, the hole in the bucket had increased so much that the firm had made a £13.9 million loss for 2015.

In spite of such losses, LCG moved its operations from Devonshire Square in the heart of the City of London’s financial district to the highly exclusive 1 Knightsbridge in London’s West End, and underwent a rebrand, part of which involved the purchase of the LCG.com domain for $175,000.

Very few of the original senior executive team that were elected to their positions in 2014 post-acquisition are still with the company.

 

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