FCA Bans BDSwiss from Offering CFDs to UK Customers

The UK financial regulator FCA announced that it has banned BDSwiss Group, a multi-regulated FX and CFDs broker, and its members including BDSwiss Holding Plc from offering high risk contracts for differences (CFDs) to UK investors. 

The regulator said that BDSwiss Group used the fact that one of its firms was regulated in the UK to convey legitimacy on the group as a whole. However, 99% of UK consumers taken on by the group traded through the group's overseas entities. These overseas firms had no authorisation to provide regulated services in the UK, and consumers who traded with the overseas firms lost the protections given to consumers who trade with an authorised firm. In particular, the overseas firms did not comply with the FCA's restrictions on the marketing and sale of CFDs to retail consumers.

Between 2017 and 2021, a total of 94,038 UK-resident clients opened accounts with firms in the Group. Of these, just 1,095 (1.16% of the total) opened accounts with the Firm. 92,943 (98.84%) opened accounts with the Overseas Firms. Overall, UK-resident clients of the Group lost over 96% of the total monies invested. Over 70 clients lost more than £100,000 each.

The FCA noted that it identified serious concerns with the sales and marketing practices of the BDSwiss Group, including the use of misleading financial promotions which made unrealistic claims about the likely returns, failed to state clearly the nature of the financial instruments being marketed and failed to outline the risks involved in trading CFDs. The Group and its affiliates frequently contacted consumers directly, using social media platforms to make contact and market their products.

In many cases, social media showed the affiliates leading an opulent lifestyle which they claimed was being funded through trading and could be emulated, which was not the case. In fact, the affiliates were paid substantial commission for referring customers to the Group.

The FCA has required BDSwiss Holding Plc to stop conducting any regulated or marketing activities in the UK and has directed it to take all reasonable steps to stop other members of the BDSwiss Group doing the same. It has also ordered the firm to close all trading positions and return the money to customers.