Financial Conduct Authority
FCA fines Charles Schwab UK £8.96 million over safeguarding and compliance failures
The Financial Conduct Authority (FCA) has fined Charles Schwab UK Ltd (CSUK) £8.96 million for failing to adequately protect client assets, carrying out a regulated activity without permission and making a false statement to the FCA.
Customers affected by the breaches were all retail customers, who require the greatest level of protection.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
‘Charles Schwab UK failed to get the correct permissions from the FCA; then failed to be open with us and, finally, failed to put in place the necessary safeguards to ensure, if required, there could be an orderly return of client assets.
FCA fines Charles Schwab UK £9m after false statement to regulator
By Justin Cash 21
st December 2020 11:14 am
The FCA has fined Charles Schwab UK over a raft of compliance and safeguarding failures, including making a false statement to the regulator.
The broker has been hit with a £8.96m penalty for failures that ranged from not adequately protecting client assets to carrying out a regulated activity without permission.
A change in Charles Schwab’s UK business model between August 2017 and April 2019 led to client money being transferred back to the firm’s US affiliate.
However, firm and client money, across both UK and US clients, was held in one general asset pool, which meant clients’ assets under UK rules were not sufficiently protected.
FCA fines Charles Schwab £9m for false claims
By Justin Cash 21
st December 2020 12:31 pm
The FCA has fined Charles Schwab UK over a raft of compliance and safeguarding failures, including making a false statement to the regulator.
The broker has been hit with a £8.96m penalty for failures that ranged from not adequately protecting client assets to carrying out a regulated activity without permission.
A change in Charles Schwab’s UK business model between August 2017 and April 2019 led to client money being transferred back to the firm’s US affiliate.
However, firm and client money, across both UK and US clients, was held in one general asset pool, which meant clients’ assets under UK rules were not sufficiently protected.
However, Charles Schwab failed to protect its clients’ assets under U.K. rules and didn’t put in place the necessary safeguards to ensure, if required, that there could be an orderly return of client assets, the regulator said.
“The firm took remedial action at various points after discovering the breaches. There was no actual loss of client assets and CSUK stopped holding client assets from Jan. 1, 2020,” the FCA said.
If CSUK hadn’t agreed to settle the case, it wouldn’t have received a 30% discount to the fine. CSUK would then have been fined £12.8 million, the regulator added.
The customers that suffered the consequences of the breaches were all retail customers, the FCA said.