FCA fine against Infinox Capital may signal widening risk for smaller financial services firms

The decision by the U.K.’s financial regulator to fine a small trading platform around ten percent of its annual profits under previously unenforced rules has wider ramifications for the sector.

Experts say the recent sanction under the 2018 U.K. Markets in Financial Instruments Regulation (MiFIR) shows that the Financial Conduct Authority (FCA) is monitoring firms’ trading activities and will take tough action if necessary. Furthermore, firms should not presume that a lack of case law indicates that the regulator is not watching.

“It would be remiss of firms to assume that the FCA is reluctant to use its enforcement powers” for serious failings, “irrespective of the size of the firm,” said Gurpreet Chahal, senior director in the financial services practice of consultancy firm FTI Consulting.