UK regulated financial services provider TradeNext has implemented a variation of permission as the firm caries out an internal review and assessment of its products and services, Finance Magnates has learned.
The move comes after Finance Magnates exclusively reported on a notification TradeNext sent out to clients in August about a possible restructuring of the company’s business. The firm has been operating in the congested FX and CFD brokerage space for over three years as an FCA regulated firm head-quartered in the City of London.
The variation of permission in TradeNext’s case is a variation of requirement. The official notice states that the firm has halted all regulated activities - the notion is reflected on the firm’s website with a note confirming the details issued on the requirement. In addition the Live Account page on its website redirects to the Contact Us page.
The Requirements:
1. With immediate effect Tradenext Limited must cease carrying on any business that involves the carrying on of any regulated activities.
2. Following such cessation of business Tradenext Limited must not initiate any further such business (including accepting new clients or new orders for existing clients) unless it has the FCA's prior written consent.
3. For the avoidance of doubt Tradenext Limited is not prevented from returning Client Money to clients.
A variation of permission is a common change in practice taken by firms for a range of reasons, including the deployment of new products and services, changes in the way a company handles client money or a downgrade of its permissions.
A variation of permission is a common change in practice taken by firms for a range of reasons
TradeNext’s requirement does not indicate any changes to its permissions, and coincides with the firm’s earlier statement that it is carrying out an analysis and assessment of its services. During this period the company is not offering any trade Execution services in financial derivatives, and to date the firm has not disclosed its findings from the internal-audit.
Client funds
The multi-asset brokerage has been returning client funds with a source with knowledge of the matter stating that all client money has now been returned. Finance Magnates reporters have contacted TradeNext for more details, however at the time of publication no comment has been provided by the company.
Variation of permission use explained
Regulated firms can apply for a variation of permission through the FCA’s online reporting software, Connect. The process can take between six and twelve months, according to the FCA’s website.
The post-SNB Swiss franc move has had a dismal effect on the brokerage space with major and minor players facing turmoil, in some cases like with LQD Markets leading to a variation of requirements.
Listed provider, Plus500, came under scrutiny for its lapsed anti-money laundering (AML) and client on-boarding procedures and had a requirement to cease business with new and existing clients, as the firm faced a Section 166 violation in relation to its systems and controls.
The FCA had also issued a Variation of Permission to LQD Markets after the company filed for bankruptcy soon after the Swiss Franc shock on January 15th.
Additionally, London-based FX and CFDs provider, La Cloche, an FCA authorized firm, got into a spot of bother with the way it handled Client Money and its overall financial position. As a result the firm was declared with a variation of requirement on the 20th of May 2015, which stated that the firm had to cease all business activities. Furthermore the requirement specifically addressed the firms’ client money dealings and a total of four points were raised in the requirement.
TradeNext’s Clients
According to sources close to Finance Magnates, a couple of internationally known brokers are in discussions with TradeNext about a potential acquisition of the company’s client base. The broker is believed to have a number of customers from across the globe as the company focused largely on the UK, EU and Asian markets.
