The UK’s Financial Conduct Authority (FCA) has lifted all restrictions on the licence of London Capital Group Ltd (LCG), a retail forex and contracts for differences (CFDs) broker owned by the now-bankrupt FlowBank. The restrictions were imposed on 13 June following FlowBank’s bankruptcy.
LCG’s UK entity operates as an introducing broker for IG Group, which was once its direct competitor.
The FCA’s previous actions against LCG included restrictions on onboarding new clients or introducing any new client under its introducing broker business. Furthermore, it could not accept new client money or carry out regulated activities. Additionally, the regulator also imposed asset restrictions on the company, prohibiting it from disposing of or diminishing any of its own assets or customer funds, whether in the UK or outside.
Now, the FCA registry has taken down the restriction conditions from the broker. Further, a notice on LCG’s website about the FCA’s restrictions has also disappeared.
A Troubled Parent, Again
LCG is owned by FlowBank, founded by former LCG CEO Charles-Henri Sabet; however, its operations seem independent of its parent.
Previously, LCG was part of the London Capital Group Holdings, which encountered trouble after delisting from the London Stock Exchange and NEX Exchange in 2018. That same year, Sabet, then CEO, bought LCG, separating it from the troubled former parent, which was liquidated. He made structural changes in LCG’s ownership after launching Switzerland-based FlowBank in 2020. Last year, the UK unit of LCG altered its business model, becoming an introducing broker for IG.
Outside Britain, the LCG brand is also operated by a Bahamas-regulated entity, which has ceased operations following FlowBank’s bankruptcy. Notably, entities in the UK and the Bahamas operated independently and had no business ties except for offering services under the same brand and sharing the same parent.
Unlike the FCA-regulated entity, the Bahamas entity operated with close ties to its Swiss parent and even maintained “funds with accounts at FlowBank SA.” Following FlowBank’s bankruptcy, running its operations became “impossible.”
The troubles of LCG started as the Swiss regulator cancelled FlowBank’s licence last month and declared the company bankrupt.
