A financial regulator in the United Kingdom disclosed that it is officially looking into the British business of Greensill, a supply chain finance firm, Reuters reported.
Supply chain finance is a type of cash advance.
The U.K.’s Financial Conduct Authority (FCA) is looking into issues connected with Greensill Capital U.K. and Greensill Capital Securities in addition to Mirabella Advisers LLP’s supervision of Greensill Capital Securities, according to FCA CEO Nikhil Rathi, per the report.
However, the watchdog indicated that it was just responsible for overseeing the way in which Greensill Capital U.K. followed anti-money laundering (AML) practices. To that end, Rathi said “the wider activities that GCUK undertook were not regulated by the FCA,” according to the report.
Rathi also noted in the report that “the origination of a supply chain finance instrument is not a regulated activity.”
But Rathi said the watchdog is “cooperating with counterparts in other U.K. enforcement and regulatory agencies, as well as authorities in a number of overseas jurisdictions,” the report stated.
As PYMNTS previously reported, Credit Suisse Group AG froze $10 billion in investment capital that fueled Greensill Capital.
The asset management division of the financial services firm said it would not allow investors to buy or sell four private investment funds that only rely on securities made by the finance startup.
“A certain part of the Subfunds’ assets is currently subject to considerable uncertainties with respect to their accurate valuation,” Credit Suisse said in a previous statement.
The investment bank was worried about the finance upstart’s exposure to Sanjeev Gupta, a U.K. businessman in the steel sector, according to unnamed sources in a report from The Wall Street Journal earlier this year.
After the suspension of funds by Credit Suisse Group and the takeover of its banking services arm by British regulators, London-based Greensill Capital filed for insolvency protection.
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