18th May 2015 14:56
LONDON (Alliance News) - Contracts-for-difference company Plus500 Ltd Monday said it has paid its final and special dividend of USD65 million amid market speculation that it had not done so, as it also suspended some UK customer accounts as it worked to tighten anti-money laundering procedures by verifying customers.
The company, which allows retail customers to trade financial instruments through its online platform, said it paid the dividends on Friday and has more than USD88 million in cash reserves, excluding the money it keeps in client segregated accounts.
Plus500 said it is in "close dialogue" with its regulator in the UK, the Financial Conduct Authority, over changes to its anti-money laundering processes.
The company provided further details after an announcement on its website said it had suspended some of its UK accounts pending customer verification measures related to money laundering investigations.
Its UK subsidiary, Plus500UK Ltd, is asking new and existing customers to provide documentation as part of implementing "certain enhanced client on boarding and anti-money laundering processes".
The move is causing delays in the approval process for opening new accounts and for new trades on existing accounts and withdrawing money.
"Only the Plus500UK regulated business is impacted, and the company will continue to offer its services to new and existing customers through its other regulated subsidiaries in Cyprus and Australia," Plus500 said in a statement.
According to Plus500, about half of its revenue comes from the UK subsidiary, with about 45% of its UK customers able to trade after passing its electronic verification process.
"Those customers who are impacted are not able to open new positions until they are approved by the client on boarding team, however they are still able to freely close out open positions and to service these existing positions with additional margin," Plus500 said.
"As usual, under AML regulations, existing customers (whether electronically verified or not) are unable to make withdrawals from their accounts until they have provided Plus500UK with fully compliant AML documents. All Plus500 customer funds are held within segregated client accounts, held with major financial institutions, until further withdrawals are permitted," Plus500 said.
The announcement on Plus500's site had noted the company's "regulatory obligation to comply with the UK Money Laundering Regulations 2007 and other rules and guidance which requires us - amongst other things - to identify and verify our customers, the nature and purpose of the business relationship and source of funds".
"While we understand the inconvenience this will cause, we have no alternative but to place a restriction on your trading account until such time as we have been able to undertake a complete review of the documentation and information we currently hold on you," the company said in a statement published on its website.
Shares in Plus500 were down 37% at 470.00 pence on Monday, the worst performer in the AIM All-Share index in afternoon trade. That's its lowest level since mid-October.
By Samuel Agini; [email protected]; @samuelagini
By Sam Unsted; [email protected]; @SamUAtAlliance
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