The FCA has imposed a penalty of £120,900 (Stage 2: 20% discount) on Xcap Securities plc, a retail investment and capital markets business, for failure to ensure adequate protection of client money and (to a lesser extent) safe custody assets. The FCA found that Xcap had acted in breach of Principle 3 (Management and Control) and Principle 10 (Clients’ Assets and associated CASS Rules). The Final Notice followed the appointment of a Skilled Person under s166. The penalty imposed by the FCA was calculated without reference to Xcap’s revenue for the relevant period. This was considered inappropriate "because a firm’s revenue could increase or decrease without the amount of client money and/or safe custody assets it is holding (and therefore the associated risks) being directly affected". Instead, the FCA determined that "the appropriate indicator in this case is the daily averages of each of the safe custody assets balance and the client money balance over which Xcap had a responsibility to ensure were adequately protected from risk of loss, diminution or delay of return to clients during the Relevant Period".