UKFCA Denies Gedik’s Request for Rolling Spot FX Permission
The UK Financial Conduct Authority (FCA) published a final notice on Gedik International's application for rolling spot FX permission recently, and the request was refused.
Authorized by UKFCA in 2020, Gedik is an agency brokerage with a focus on instruments of Turkish origin and with a specific emphasis on exchange traded equities and futures, bonds for professional clients and eligible counterparties.
Gedik submitted an application to the FCA on March 27 2020, applied under section 55H of FSMA for a variation to its Part 4A permission to include the following:
a. Arranging, safeguarding and administration of assets; and
b. Rolling Spot FX (across all current activities for which the firm has permission).
The regulator explains that the requested VOP would permit the firm to carry out its existing regulated activities in relation to the additional regulated financial instrument of Rolling Spot FX contracts. It would also permit the firm to arrange the safeguarding and administration of assets, so that the firm could arrange an account with a prime broker to handle the custody of the Rolling Spot FX contracts on behalf of the firm's clients.
The reason to the refusal, as provided by the FCA, is because the permission of rolling spot FX products would create a stream of prospective revenue that should have been obvious to the firm at the time the application was submitted.
Accordingly, the FCA considers the firm's contention that its business plan and financial forecasts would not change as a result of the VOP is unsupportable and therefore incorrect.
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