GFSC Enforcement Action – ITI Trade Ltd & Mr Alex Phil

On 18 July 2025, the Guernsey Financial Services Commission (GFSC) issued a public enforcement decision against ITI Trade Ltd (in Administration Management) (ITI Trade) and its former director, Mr Alex Phil (formerly Alexei Filatov), following serious regulatory breaches.

Key Sanctions

• ITI Trade was fined £175,000.
• Mr Alex Phil was fined £35,000, prohibited from holding a supervised role for 2 years and 10 months, and had fiduciary exemptions disapplied for the same period.

Background

ITI Trade provided execution only and prime brokerage services in respect of various investments. The firm operated an outsourced model, relying heavily on external and internal group providers. The main service provider was ITI Trade’s Russian sister company, which provided core functions including customer onboarding, relationship management and transaction monitoring. The firm had limited direct contact with clients, many of whom were high-risk individuals from higher-risk jurisdictions.

The GFSC’s enforcement investigation was triggered when the GFSC suspended the firm’s POI licence and applied to the Royal Court for the appointment of Administration Managers in 2022. The Court can make an administration management order where, among other things, it is satisfied that to make the order is necessary for the protection of the public or the reputation of the Bailiwick of Guernsey as a finance centre.

Before the ITI Trade’s licence was suspended it had engaged in several Risk Management Programmes (RMPs) and a remediation project that was outsourced to a third-party compliance provider.

Regulatory Failures

The GFSC found wide-spread systemic breaches including:

• No Enhanced CDD had been applied to the Russian sister company to qualify it as a correspondent and exempt ITI Trade from some of its CDD obligations.
• ITI Ltd have very little knowledge of who its clients were.
• Systemic failures to conduct adequate CDD and ECDD.
• Failure to identify, verify and sanctions-screen underlying clients on whose behalf the Russian sister company was acting.  These clients made up more than 75% of the firm’s Assets Under Management.
• Failure to conduct and regularly review customer risk assessments. The assessments carried out by the firm’s sister company were inadequate and did not consider relevant high risk factors.
• Examples of services being provided to individuals publicly linked to financial crime allegations, and using complex ownership structures known to be potential conduits for money laundering.
• Lack of oversight of outsourced service providers, and a failure to understand the risks inherent in an outsourced model.
• Non-compliance with transitional provisions of the GFSC Handbook.
• No evidence that customer transactions and activity were appropriately monitored.
• Failure to adopt or review appropriate and effective AML/CFT policies, procedures and controls.
• Corporate governance failings, including failure to keep proper records and manage risk.
• Failure to adequately complete the RMPs it had agreed with the GFSC to undertake.
• Mr Phil failed to meet the Minimum Criteria for Licensing.  He lacked probity, competence, soundness of judgment and diligence.

The firm’s practices allowed it to appear as a Guernsey-based investment service provider while operations were effectively conducted in Russia, where standards did not meet Guernsey’s regulatory expectations.

Settlement

Both the firm and Mr Phil settled early in the process, resulting in reduced penalties.

What This Means for Regulated Firms

This decision underscores several critical expectations for firms regulated by the GFSC:

• Client Due Diligence: Firms must ensure they have direct and verifiable knowledge of their clients, including beneficial owners and controllers, regardless of intermediaries.
• Outsourcing Oversight: Firms must maintain robust oversight of outsourced functions, especially when these are performed in jurisdictions with lower regulatory standards. Delegation does not absolve responsibility.
• Risk-Based Approach: Firms must know and understand their clients.  High-risk relationships require enhanced due diligence and enhanced monitoring. Firms must not rely on outdated or incomplete information.
• Governance and Accountability: Directors and senior managers are personally accountable for ensuring compliance. Failures in governance can result in personal sanctions.
• Transparency of Operations: Firms must operate in a manner consistent with their licensed jurisdiction.

This case serves as a strong reminder that regulatory compliance is not just procedural – it is foundational to maintaining trust, integrity, and the reputation of Guernsey’s financial sector.

SW Offshore specialises in providing practical and hands-on regulatory and compliance advice to clients. We have in-depth experience gained from several decades of private practice, in-house counsel and regulatory roles. Our lawyers have held MLRO/MLCO roles and know first hand the practical issues faced by regulated businesses in designing and implementing effective compliance programmes.