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Screenshot of a breaking news alert e-mail from Q2 2017
High-flying retail forex broker Plus500 Ltd (LON:PLUS) has hit the first major speed bump in its existence as a public company, following a two-year march upward in its share price since going public in July 2013.
As of the time of writing, Plus500 shares have dropped a whopping 28% (!!) Monday, following a posting Plus500 made to the Homepage of its UK website stating that they 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 hold currently on you‘. (For the full text of the posting see below).
The problem apparently stems from a system overload Plus500 experienced late last week (as was exclusively reported at LeapRate), causing problems with client documentation at Plus500.
Sounds simple, but UK money laundering rules require all client documents to be accessible and up-to-date before trading or actions such as withdrawals can happen. Without access to those client documents, Plus500 is apparently scrambling to manually confirm documents, or is asking clients to send in new documentation.
Until the documentation issue is sorted out, clients of Plus500 will be unable to open any new trades, nor to deposit or withdraw funds. Clients with existing open trades will, however, still be able to freely service their existing positions with additional margin.
We’ll continue to follow this story as it develops.
The posting on Plus500’s UK website reads as follows:
Please Read: Urgent Update regarding restrictions on your Plus500UK Trading Account
As an authorised financial institution, Plus500UK Limited has a 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.
Whilst 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 hold currently on you.
Until the review has been satisfactorily carried out, you will be unable to open any new trades on your account, deposit or withdraw funds. If you have any open trades you will, however, still be able to freely service your existing positions with additional Maintenance Margin, although again, will not be able to withdraw funds until the review is complete.
If, during the review of your account, you are required to provide additional proof of address documents, please make sure you follow these guidelines:
The proof of address document must be issued by one of the following: a financial institution, a utility company, a government agency or a judicial authority. Examples include:
Bank statement or
Credit card statement or
Electrical bill or
Water or gas bill
Council Tax bill
(** Please note that a mobile (cellular) bill cannot be accepted.)
The document must:
Display your exact name and address
Be not more than 6 months old
Visible in full
We assure you that, as soon as the review is successfully complete, you will be able to re-commence trading activities, including depositing and/or withdrawing funds.
We value you as a customer and sincerely apologise for any inconvenience caused. Thank you for your patience.
The Plus500 Team