Broker faces serious problems: CySEC Withdraws AFX License

Recently, CySEC announced that it had suspended the license of AFX Capital Markets LTD. Allegedly, the Investment Company has violated several investment services laws, as well as non-compliance with the Directive about the safeguarding of clients’ funds. CySEC also stated that it would start an investigation concerning violations of other financial regulations. This license termination also applies to AFX-owned subsidiary STO, which uses the same authorization number.  The investigation process involves CySEC inviting clients to the claims portal for them to enter the necessary details and state their complaints against AFX.

On its official web-page, CySEC has made a statement that highlighted the fact that the previous alleged violation sparks concern about the risks relating to the protection of the Company’s clients. It also constitutes a threat to the integrity of the trade market.  Also, the financial regulatory agency declared that AFX had no enough necessary safeguard procedures to protect client assets.  Thus, this raised additional concerns about its competence to hold sufficient funds to refund and settle obligations.

AFX Regulatory Woes

For now, AFX is asked to complete all of its transactions per client instructions. Also, the broker has to start returning all funds and financial instruments which are refundable to its clients.

Meanwhile, the company cannot:

• Provide any investment services or other financial activities.
• Offer any business transaction.
• Advertise itself as a financial provider.

AFX’s collapse was inevitable, as it had problems earlier with its UK operations.  However, CySEC was not the only regulatory agency that became interested in AFX’s affairs. Moreover, in August, the FCA found severe problems in the broker’s operations and confirmed the appointment of special administrators at the AFX.

Moreover, AFX Group is the second-largest European subsidiary of AFX Markets. Allegedly, it submitted to the Financial Conduct Authority, up to 1200-client accounts that hold assets worth £7.5 million.