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Release Date: 5th June 2023

To access the original FCA document, click here.


ED&F Man Capital Markets Ltd (MCM) has been fined £17,219,300 by the Financial Conduct Authority (FCA) for breaches of Principles 2 and 3 of the FCA’s Principles for Business during the period from February 2012 to March 2015. The breaches were related to MCM’s involvement in dividend arbitrage trading, which led to illegitimate payments exceeding £20 million by the Danish Tax Authority (SKAT) to MCM’s clients, with MCM earning £5 million in fees.

Key Reasons for the FCA Fine:

  1. Inadequate Oversight and Risk Management: MCM failed to provide proper oversight and risk management for its Equity Finance Desk, particularly in its dividend arbitrage trading strategies.
  2. Lack of Due Diligence: There were significant lapses in obtaining and verifying tax and legal opinions necessary for the trading strategies.
  3. Compliance Failures: The Compliance function at MCM did not effectively monitor or review the trading activities and placed undue reliance on senior managers without verifying the required legal and tax opinions.
  4. Misleading Tax Vouchers: MCM issued inaccurate Tax Vouchers that facilitated illegitimate withholding tax claims, leading to substantial wrongful payments by SKAT.

Key Takeaways for Other Firms:


The FCA’s fine against MCM underscores the critical importance of rigorous oversight, diligent risk management, and effective compliance in financial operations. Firms must ensure robust systems and controls are in place to prevent similar breaches and the resulting significant financial penalties.

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