Trading in shares of the publicly listed brokerage, Plus500 Ltd (LON:PLUS), on the London Stock Exchange (LSE) Alternative Investment Markets (AIM) on Monday has been quite volatile. The company's share price closed down 8% after recovering from an almost 15% fall after the market opened for trading.
A report by the The Times alleged that the Financial Conduct Authority (FCA) had launched a review of Plus500 Ltd's customer on-boarding process. According to the newspaper, the review process has been triggered after the firm's competitors raised their concerns with the UK regulator.
The main issue at hand, according to the report, is that Plus500 Ltd (LON:PLUS) does not conduct a KYC (Know Your Customer) check when a new customer opens an account, but only after the client requests for a withdrawal.
A company spokesperson stated to The Times that the firm is “fully compliant” with money laundering rules and is “as ever, engaged in a proactive dialogue with the FCA.”
There is no official information to confirm the content of this report as of the time of publication, as there is also no proof that an FCA investigation is indeed ongoing, as stated in the article by The Times newspaper.
The firm's recent share price performance has been out of sync with other publicly listed peers in the market, which have started to gain market share as FX volatility spiked higher in the wake of recent comments by the ECB and the Scottish independence vote.
That said, Plus500 Ltd (LON:PLUS) is still trading 27% higher since the beginning of the year, which makes it the best performing stock in the industry, when compared to UK publicly listed peers like IG and LCG, and also US listed FXCM and GAIN Capital.
Recently, the firm reported a somewhat disappointing second quarter result with acquisition costs rising, but received a favorable shareholder withholding tax ruling from the Israel Tax Authority.
