Gain Capital UK Limited

Activities and protection

What they can do, and how you are protected

• Manage or trade investments FSCS may apply
  Eligible investment and pension claims are typically FSCS-protected up to £85,000 per person, depending on the product and your circumstances.

  Check your FSCS cover →

Complaints: You can refer a complaint about this firm to the Financial Ombudsman Service for free, whichever activity it relates to.

Track record

Action taken against them

2 fines between 2005 and 2011, £525,000 in total. This is part of the official register record and is worth reviewing before going ahead.

• Fined £490,000 on 20 January 2011

  On 20 January 2011 the FSA imposed a financial penalty of £490,000 on City Index Limited in respect of breaches of FSA rules set out in chapter SUP 17 of the FSA Handbook and breaches of Principles 2 and 3 of the FSA's Principles for Businesses which occurred between 5 November 2007 and 21 September 2009 (the Relevant Period). In breach of SUP 17 City Index failed to submit accurate transaction reports in respect of nearly 60% of its reportable transactions, in that it failed to report approximately 55,000 transactions and it reported approximately 1,970,000 transactions with one or more data fields completed improperly. City Index also breached Principle 2 by failing to conduct its business with due skill, care and diligence through failing to identify fundamental errors in its transaction reporting process upon the implementation of a new trading platform, and Principle 3 by failing to take reasonable care to organise and control its affairs responsibly and effectively in relation to transaction reporting, in that throughout the Relevant Period, it failed to have in place adequate transaction reporting processes and procedures to ensure that it was fully compliant with requirements under SUP 17.

• Fined £35,000 on 23 March 2005

  The Financial Services Authority (FSA) has fined City Index Ltd £35,000 for producing misleading financial promotions for spread betting and contracts for differences (CFDs) between September and November 2003. The firm has also been fined for failures in its systems and controls that allowed the promotions to be distributed. City Index communicated financial promotions to the general public through daily national newspapers, magazines and on carrier bags used by selected sandwich shops. This promotional strategy had the potential to attract customers to high risk investments without adequately describing in the promotions the commitment required and the risks involved with spread betting and CFDs. Spread bets and CFDs are both high risk investment activities as, if the position moves against the customer, he or she can rapidly incur liabilities far in excess of the initial stake. It is therefore important that financial promotions disclose that a customer's liability may exceed the customer's initial deposit (or margin) in a clear, simple and prominent manner so that potential customers fully understand the risk they are taking on. In failing to do this, City Index produced financial promotions which did not contain an adequate description of the commitment required and the risks involved with spread bets and CFDs (namely the fact that a customer may be committed to place more money with the firm in order to meet the commitment incurred through a spread bet). In addition in some cases where financial promotions did contain such warnings this was not prominent enough. The FSA also found that a financial promotion communicated on carrier bags did not include a fair description of the nature of an investment offered by City Index. That promotion referred to a free £25 bet. The bet was not free because of a requirement that a potential customer had first to place an initial spread bet through City Index in order to become entitled to the free bet. The customer could lose all, and potentially much more, of the customer's initial spread bet before becoming entitled to the free bet. In addition the FSA found that City Index failed to maintain effective systems and controls for ensuring compliance with FSA rules and principles relating to the communication of financial promotions. This included a financial promotion which could have created confusion in the market place between City Index and one of its competitors. Anna Bradley, Director of the FSA's Retail Themes Division, said: Providing clear, fair and not misleading financial promotions is a key priority for the FSA because of the potential impact that misleading promotions can have on consumers. Potential customers must be able to discern the key risks of an investment as well as its benefits. This is particularly the case in relation to high risk activities such as spread betting where there is a risk that a customer could lose substantially more than his original deposit. It is crucial that all firms ensure they establish and maintain rigorous and effective procedures for approving financial promotions. As part of our commitment to assist the industry we have produced a publication outlining for firms our approach to regulating financial promotions, some key issues and our next steps. We have also included on the FSA website some pages on financial promotions which will provide further assistance for firms. However, firms must remember that it remains their responsibility to produce balanced, unambiguous promotions that help consumers to make the right choice about the right product at the right time. The FSA's Financial Promotions Department was set up last year to increase the monitoring and detection of financial promotions that breach regulations. Since the Department was set up, the FSA has also taken action in financial promotions cases involving AXA Sun-Life, Cantor Index (which also related to spread betting), Hemscott Investment Analysis Ltd, and Highbury Financial Services Limited. Anyone who sees a financial promotion they think is misleading should report it to the FSA either through the FSA's website or through the financial promotions hotline on 0845 730 0168.

Common questions

Frequently asked questions