City Credit Capital (UK) Limited (CCCUK), a forex and contracts for difference (CFDs) brand that has been in the industry for nearly two decades, has become insolvent. The Financial Conduct Authority (FCA) disclosed today (Tuesday) that the brokerage has entered bankruptcy administration.

CCCUK Becomes Insolvent

FCA in a statement noted that it appointed insolvency advisory firms Begbies Traynor (Central) LLP and AABRS Limited as joint administrators of CCCUK on Friday. The process is to be led by Gary Paul Shankland and Jamie Taylor from the first firm and Christopher Andersen from the second.

The watchdog said the move follows an application for administration by the directors of CCCUK. FCA register shows CCCUK was led by Raymond Yip as the Chief Executive Officer.

However, FCA in its statement did not state why CCCUK went bankrupt. This is even as the watchdog’s register shows that the company, which provided online dealing services to private investors, institutions, banks and brokerages, applied to cancel its authorization. The register also notes that CCCUK operated under the trading names, CIX Markets and Markets Trader.

“The Joint Administrators are responsible for managing claims against CCCUK and returning funds to customers where possible,” FCA stated in the statement. “Customers should receive more information from them shortly, including details on how to make a claim.”

CCCUK in its financial report for the year ended December 2021 reported a 41% decrease in margin-in compared to its performance in the previous fiscal year. Margin-in is a metric that measures a company's profitability by calculating the difference between the price at which a product is sold and the cost of production.

“The Group recorded a loss in the year ended 31 December 2021 during which time the global economy has suffered as a result of the Covid-19 pandemic coupled with various government strategies to manage it,” Yip explained in the company’s financial report filed with the UK Companies House in September last year. “Should losses continue to be made without additional capital being provided, the company may breach the regulatory capital resources requirement which in turn may lead to supervisory action by the Financial Conduct Authority.”

CCCUK Ceases Trading

The launch of the bankruptcy administration comes as FCA on June 20th, 2023, placed restrictions on the CCCUK's permissions to prevent it from carrying out any regulated activities. The financial markets supervisor also demanded that the firm preserve its clients' money. In addition, FCA ordered the firm to place a notice on its website informing clients that it was no longer permitted to conduct regulated activities and that all client positions will be closed.

A check by Finance Magnates shows the firm’s website now runs a message that says CCCUK “has ceased to trade.” In one of the frequently asked questions (FAQS) on its website, CCCUK wrote that the joint administrators are required to submit in eight weeks’ time proposals detailing, among other things, expected returns to creditors and the reason the firm entered into administration.

CCCUK was incorporated on December 19, 2001, as Smart Link Financial Services (UK) Limited. However, the firm stopped using the name in October 2002, according to details on the UK Companies House.