The FCA has publicly censured Premier FX for failing to safeguard its customers’ money and for misuse of its payment accounts under the Payments Services Regulations.

In doing so, the regulator suggested Premier FX “seriously misled” its customers about the services it was authorised to provide, and how it held customers’ money.

Premier FX was authorised by the FCA under the Payments Services Regulations to perform money remittance, which is the transfer of money without any payment account being created in the name of the customer, and where the funds are solely received to transfer a corresponding amount to a third party.

However, an investigation has found the firm seriously misled its customers by informing them it was able to hold their funds indefinitely, that their funds would be held in secure, segregated client accounts and that their funds would be protected by the Financial Services Compensation Scheme.

The FCA revealed that none of these claims were true, and that because of the misrepresentations, many customers paid their funds to Premier FX to hold money without an onward transfer instruction, on the basis that the funds would be repayable on demand.

The sole shareholder and director of Premier FX, Peter Rexstrew, who died in 2018, controlled all aspects of the firm’s operations. The FCA stated that restricted access to Premier FX’s bank accounts, and save for brief periods when he was incapacitated through illness, dealt with nearly all of the transactions out of and between the accounts. The FCA said it has not found evidence that any other employees were involved in the deception.

FCA executive director of enforcement and market oversight, Mark Steward, commented: “This has been a complex investigation involving the analysis of hundreds of thousands of transactions across Premier FX’s bank accounts over the course of several years, in a range of currencies and through a number of overseas bank accounts. The investigation was complicated further by a lack of proper records.

“We may never understand Peter Rexstrew’s motivation for operating Premier FX in this way, using new customers’ funds to pay existing customers or business expenses. Whatever the reasons for his deception, his scheme completely unravelled within a few weeks of his death, leaving a mess for others and losses for customers. Our notice sets out our findings on what happened as a matter of record.”

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