Scottish Limited Partnerships, often fronting for binary options firms, fail to comply with new rules

Maria Nikolova

Conservative MP Margot James puts number of Scottish Limited Partnerships that have failed to comply with the new transparency rules at 28,100.

Scottish Partnerships (Register of People with Significant Control) Regulations 2017, which came into force  in the summer, were seen as a means to increase transparency and to clamp down on companies that use the special status of Scottish Limited Partnerships (SLPs) to conduct criminal activities. As FinanceFeeds has earlier reported, SLPs are often fronting for binary options firms.

The latest numbers provided by UK officials, however, are not offering us a positive bit of news. Margot James, Conservative MP, has said:

“Approximately 28,100 Scottish Limited Partnerships failed to supply statements of Persons of Significant Control by the deadline given in the Scottish Partnerships (Register of People with Significant Control) Regulations 2017.”

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.

The above regulations also require a Scottish qualifying partnership (SQP) to register with Companies House and deliver information concerning its People with Significant Control (PSC). An SQP is a general partnership constituted under the law of Scotland that is a qualifying partnership under the Partnership (Accounts) Regulations 2008. As of September 22, 2017, only 493 SQPs have delivered PSC information to the UK Companies House.

The breach of the new rules leads to daily fines of up to £500 for the SLPs.

How the new rules will be enforced and how the violations will be investigated and penalized has yet to be seen. The Scottish Herald quotes Duncan Hames of Transparency International who says that:

“Now we have these new rules, Companies House can begin proceedings to investigate – and if necessary strike off SLPs which do not comply.”

Margot James said that Companies House was taking action to secure compliance.

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 reveal the identity of their owners and to file no accounts. A recent report by the Scottish Herald has claimed that 43 Scottish shell companies act as corporate fronts for binary options sites. Of these, 41 are Scottish limited partnerships. Moreover, at least 22 of the shell companies are named as owners or payment processors on websites subject to international warnings.

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