Cum-ex trading – the scandal that keeps on giving (although don’t tell anyone!!).
The Financial Conduct Authority has fined boutique investment bank Sapien Capital £178,000 for failing to identify financial crime relating to cum-ex trading.
The case is the first by the regulator in relation to cum-ex trading, dividend arbitrage and withholding tax reclaim schemes.
Cum-ex trading involves
- Trading listed equities around their dividend date so that more than one party can claim withholding tax, a practice the FCA said is
- “Highly suggestive of sophisticated financial crime”.
The FCA said in a 6 May statement.
- Sapien Capital, which executed more than £6bn of trades in Danish and Belgian stocks for Solo Group, did not have
- “Adequate systems and controls” in place between 10 February 2015 and 10 November 2015,
the FCA’s final notice said
- “Sapien failed to exercise due skill, care and diligence in applying anti-money laundering policies and procedures and in failing properly to assess, monitor and mitigate the risk of financial crime in relation to clients introduced by the Solo Group and the purported trading,”