Clarification: Plus500 not forcing clients to move to Cyprus sub, shares trade up 18%

Further to our earlier article entitled Plus500 transfers London clients to Cyprus, which was based on a letter sent to a client by Plus500 Ltd (LON:PLUS), we have been able to clarify the situation a little better.

It seems as though Plus500 is not automatically transferring any Plus500 UK clients to Plus500 CY (both regulated subsidiaries). Instead, Plus500 has been approaching its non-UK clients which have zero balance in their accounts, letting them know that they can continue trading with the company by opening a (new) account with Plus500 CY, regulated by CySEC. New-client documentation will be required as usual at Plus500 CY, which is operating normally.

But again, it is the client’s choice whether or not they want to open a new account with Plus500 CY.

Clients of Plus500 UK with either open trades or cash in their accounts are not being transferred to Plus500 CY, as their positions/cash remain frozen at Plus500 UK, as the company works out its anti-money laundering (AML) and know-you-client (KYC) procedures with the regulator FCA. As we indicated earlier, Plus500 has stated that it will likely take about a month to work through the existing client documentation backlog, as well as to implement upgraded new client onboarding processes.

Even if Plus500 wanted to, it cannot transfer Plus500 UK client accounts to Plus500 CY – the UK accounts remain frozen as Plus500 works through the AML / KYC process and documentation issues noted above.

Plus500 share price May 28

In the meantime, it seems as though Plus500’s own shares remain a highly sought-after speculative stock to trade. After losing more than two-thirds of its value in the week between May 15-22, Plus500 shares have staged something of a comeback, including an 18%+ rise in LSE AIM trading on Thursday.

It seems to us as though (mainly retail) traders are beginning to bet that Plus500 will soon be able to get over their current issues with the FCA, and get the business back on the growth trajectory they were on prior to the recent UK account freeze.

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