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.

Read this next

Retail FX

Pepperstone adds Capitalise.ai analytics and automated trading tools free of charge

“We look forward to bringing significant value to Pepperstone traders and making a real, positive impact in their daily trading habits. We are excited to welcome them on board.”

Retail FX

FP Markets wins Best Global Value Broker for 4th consecutive year at the 2022 Global Forex Awards

“We greatly appreciate the continued international recognition as at FP Markets we pride ourselves on these attributes and these prestigious awards are testament to the hard work from our global team to always provide our clients with the ultimate trading experience.”

Inside View

How to Engage Your Customer at Every Stage of Their Journey

As many as 89% of successful businesses say that providing assistive customer experiences is critical to their growth. That’s because a mere 5% increase in customer retention can boost profits by 25% to 95%.

Industry News

CFTC fines Chinese firms Chinatex and COFCO $720,000 for wash trading

Chinatex traders engaged in wash trading in order to liquidate a long position in the account of an affiliated company and re-establish the position in its own account, to the ultimate benefit of its parent company, COFCO.

Industry News

US-based operation of Brazilian broker XP fined $500,000 for recordkeeping failures

“Proper recordkeeping is vital to protecting our markets and market participants from fraud and manipulation. This case serves as another example of the Commission’s intent to vigorously enforce the recordkeeping obligations of its registrants.”

Digital Assets

Bitfinex announces integration of USDt on Polkadot

Polkadot is the brainchild of British computer programmer and Ethereum co-founder and former CTO Gavin Wood.

Executive Moves

FPG hires ex-Fireblocks Chris Hazelton to head marketing at crypto prime broker

“Chris’s experience as a marketing leader at several exceptional businesses will help us refine our message to an institutional audience that’s overwhelmed with new information and show tangible examples of how we’ve helped customers like them scale successfully in crypto.”

Podcasts

FinanceFeeds Podcast Ep. #6: Gold-i’s Tom Higgins talks efficiency in FX and inner workings of Crypto Switch

On its sixth episode, the FinanceFeeds Podcast welcomed Tom Higgins, the founder and chief executive of trading systems integration provider, Gold-i.

Digital Assets

Coinigy launches Crypto Screener Tool for spot, DeFi, and derivatives

“Traders can tap into a vast dataset covering the entire crypto ecosystem, which spans nearly a decade, to identify opportunities and act quickly. This is an essential tool for all active and professional traders, including day traders.”

<