Linear Investments with 0,5 million GBP penalty from FCA

The British financial supervision, FCA, announced the imposition of a financial penalty on Linear Investments Limited - a company providing liquidity to Forex brokers. The fine amounts to GBP 584.

Lack of due diligence

According to the published announcement, Linear Investments did not keep the so-called due diligence when controlling and monitoring the activities of its clients, which are Forex brokers. As a result, there was a series of abuses in trade. The procedure lasted for over 2 years - from January 14, 2013 to August 9, 2015.

Linear admitted that they were accused, but they have objections to the amount of the sentence itself.

Manual = wrong?

Until the middle of 2015, the liquidity provider used the so-called limited supervision over transactions made via DMA (Direct Market Access), which means direct market access. The limitation resulted from its manual (manual) form, which together with the increase in turnover turned out to be insufficient for effective monitoring of transactions, which the company observed in November 2014. The introduction of an automated system that would fulfill its role took less than a year and occurred in the infrastructure Linear only in August 2015 ..

The amount of the penalty

The British FCA places particular emphasis on reporting suspicious transactions and activities by Forex / CFD brokers, and counteracting market abuse is their priority. The consequence of this is the decision to impose a fine of 584 700 GBP on the title liquidity provider for insufficient control over the activities of its clients, which resulted in the lack of detection of any abuses in the trade.

A new process was introduced in Great Britain, introduced in the event of any disputes between the regulator and a financial institution. Thanks to it, a company suspected of abuses as a result of admitting to the allegations (or part of them) may receive up to 30% "rebate" up to the amount of the penalty ordered by FCA. This is also the case here - Linear agrees with the allegations, but rejects the original fine. If the "discount" is included, the penalty will be "only" £ 409.