The Financial Services Compensation Scheme (FSCS) says it will be able to compensate eligible FIXI clients whose money has not been returned.
31 October 2019, AtoZMarkets – The FSCS exists to protect customers of financial services companies that have failed. If any customer is dealing with the company which has gone bankrupt and cannot pay the claims against it, FSCS can intervene to pay compensation. The FSCS of the United Kingdom has just published an update for FIXI plc, an online brokerage firm that went into liquidation on May 31, 2019.
The FSCS says it will be able to protect eligible applicants (individuals and small businesses) whose money has not been paid. So, the organization made this decision because of the type of investment and how authority holds it. The Scheme can cover the shortfalls of eligible customers whose claims are valid up to a maximum of £ 85,000.
Criteria to Claim Compensation from the FSCS
Notably, clients could claim compensation with FSCS if they meet all the following criteria:
- The financial services company with which any client did business failed and cannot repay his/her money itself (the company is “in default”). In the case of FIXI, the company was declared in default on August 30, 2019.
- The FCA or PRA has authorized the company under the FSMA to carry on regulated activities at the time any client did business with it.
- The company owes any client a civil liability. They are in connection with a regulated activity covered by FSCS (e.g., advice on designated investments).
- The client has suffered a real financial loss as a result. Clients are private individuals (although some businesses and charities may be eligible, depending on the type of claim).
- The FSCS is working with the liquidators to put in place a process for returning funds. And it hopes to be able to start returning money very soon.
Since its inception in 2005, FIXI has been an online brokerage. It is providing trading platforms to professional, institutional and retail clients. They can access the FX, CFDs and financial spread betting.
On December 20, 2018, FIXI voluntarily agreed to have its regulatory permissions varied (VREQ). Then, FIXI has decided not to carry out any regulated activity without the prior written consent of the FCA. Also, FCA notified FIXI to close all open trading positions. On May 1, 2019, a board of directors decided to put FIXI into liquidation.
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