FCA Fines DMBL £338K After Surveillance Gaps Left $3 Billion in CFD Trades Undetected
The UK’s Financial Conduct Authority has fined Dinosaur
Merchant Bank Limited (DMBL) £338,000 for failing to implement effective
systems to detect and report suspicious trading in its contracts for difference
business.
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The fine comes amid broader regulatory developments in the
UK CFD sector. A Finance Magnates Intelligence analysis highlights overlapping
requirements for UK CFD brokers, including rules for reporting operational
incidents and third-party disruptions through a single portal. The report also
notes other emerging compliance obligations that collectively increase the
sector’s regulatory burden.
FCA Flags DMBL’s Missed CFD Trades
In June 2024, DMBL launched a new order system. This led to
a significant rise in CFD trading on its platform. Between June and October
2024, clients executed trades worth approximately $3.05 billion. The FCA found
that these trades were not captured or reviewed by DMBL’s automated
surveillance system, meaning potential market abuse could have gone undetected.
DMBL identified the issue in October 2024 but did not fully
address the deficiencies until May 2025. The regulator said the delay
restricted the firm’s ability to detect and report potentially suspicious
trades.
FCA Reduces DMBL Fine Thirty Percent
Steve Smart, joint executive director of enforcement and
market oversight at the FCA, said: “DMBL’s failures had the potential to
undermine the integrity of the market. Firms must ensure they have effective
surveillance arrangements in place. We will continue to take action where this
is not the case.”
DMBL cooperated fully with the FCA investigation and
qualified for a 30% discount on the fine. Without this reduction, the penalty
would have been £482,900.
A spokesperson for DMBL said: “We worked constructively with
the FCA to resolve this historical matter. During 2025 [May], DMBL ceased CFD
operations and implemented improvements across the firm which addressed the
FCA’s concerns.”
FCA Plans Faster CFD Oversight Tools
The FCA plans to expand its
use of artificial intelligence and data tools in 2026/27 to support supervision
of higher-risk retail segments, including CFDs. The regulator is developing new
authorisation systems, simplifying reporting, and expanding its sandbox for AI
testing.
Additional measures include fee adjustments, updates to the
My FCA platform, and enhanced monitoring of financial crime and consumer harm.
The programme aims to improve efficiency, risk detection, and regulatory
consistency.
This article was written by Tareq Sikder at www.financemagnates.com.
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