The Financial Conduct Authority (FCA) has fined Cypriot contract for differences (CFD) firm Forex TB Limited (FXTB) £276,100.

The fine was issued for the firm failing to treat its customers fairly and providing investment advice without being authorised to do so.

FXTB was required to stop providing services to UK consumers by the FCA in April 2021, with no business conducted by the firm since then.

Furthermore, from October 2023, FXTB no longer held any FCA permissions.

The watchdog stated that it would have imposed a fine of £1.215m, but FXTB had demonstrated that this would have caused it serious financial hardship.

CFDs are complex leveraged financial products used to speculate on the movement in prices on a wide range of assets, and therefore carried a considerable risk of substantial losses, the FCA noted.

It found that FXTB had pressured customers to put their money at risk through CFD trading and had encouraged some customers to borrow money from friends or family members.

In addition to this, the FCA found that the firm frequently provided its customers with investment advice, despite not being authorised to do so.

FXTB’s customers had little experience in trading and did not always understand the risks associated with CFDs, which were not appropriately explained to them, according to the FCA.

Furthermore, FXTB enabled its customers to become ‘professional clients’ by urging them to give false information, leading to these consumers losing their protections that they would have had a ‘retail clients’.

Commenting on the announcement, FCA joint executive director of enforcement and market oversight, Therese Chambers, said: “FXTB’s misconduct was particularly egregious since it relied on the exploitation of customers who, because of their inexperience, were particularly vulnerable.

“By intervening early in April 2021, we helped prevent further consumer losses.”

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