Scottish Limited Partnerships, often fronting for binary options firms, escape from fines over non-compliance with new rules

Maria Nikolova

Conservative MP Margot James has just confirmed that no Scottish Limited Partnerships have been fined since the People with Significant Control rules came into force.

It seems that the new rules that obliged Scottish Limited Partnerships (SLPs) to disclose the identity of their beneficial owners and thus boost transparency are not much of a financial threat for those entities that refuse to comply with them.

As FinanceFeeds reported last week, 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. The official answer, which was published today, is pretty straightforward.

“No Scottish Limited Partnerships (SLPs) have been fined since the People with Significant Control (PSC) register came into force”, says Conservative MP Margot James.

Margot James further explains that “Compliance is Companies House’s primary aim, rather than prosecution. It is taking action to ensure that all SLPs report their PSC information”.

Apparently, SLPs are, for the time being, safe from the fines envisaged by the new rules. In case the partnerships fail to comply with the requirement to identify their owners, they are supposed to pay daily fines of up to £500.

Margot James added that “Where SLPs do not comply, Companies House will consider what further action to take. Cases may be passed to enforcement agencies who will, where appropriate, conduct a criminal investigation, possibly resulting in prosecution”.

This, however, is a pretty abstract statement given that no fines have been imposed thus far.

SLPs often front for binary options firms 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.

The UK authorities are taking steps to clamp down on binary options fraud. On October 17, 2017, the City of London Police conducted a day of action targeting binary options scammers. Meanwhile, the number of people falling victim to binary options fraud is rising. A total of 2,065 people have reported being a victim of binary options fraud to Action Fraud since 2012, with the amount lost exceeding £59 million.

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