CySEC Returns CIF Licenses
The Cyprus Securities and Exchange Commission has recalled the partial suspension of CIF licenses for F1 Markets and Magnum FX.
The Cypriot regulator suspended the licenses of both the forex brokers, along with two others, at the beginning of June. This was for 30 days, upon the request of its counterpart in the United Kingdom.
The Financial Conduct Authority flagged these brokers for operating in the country without any authorization. It ordered them not to take new clients in the country and that they must terminate relations with existing clients.
The UK watchdog, CySEC, alleged that neither of these firms provided customers with sufficient information regarding the nature of CFD products. Some were pressured into making highly leveraged-bets in CFDs referenced cryptocurrencies, forex, shares, and indices.
Complying with Regulatory Needs
For the first two brokers, the CySEC had withdrawn the suspension within 15 days. But for the other two, Hoch Capital and Rodeler, it did not update anything. This means the license suspension might remain for the whole month.
According to CySEC, both of the greenlighted brokers have stopped accepting and onboarding new clients. They have stopped all marketing and promotion of its services. Moreover, they have assigned, to their internal auditor, the assessment of its compliance with Article 9 of the Directive 87-05. This includes the submission of weekly reports to the CySEC.
Both the brokers also assured that they will go into an escrow with internal auditors. This will be utilized to resolve existing open client complaints and intends to make changes in its organizational structure. More specifically, to replace members of their management.
The original license suspension detailed what would happen if any of the four brokers failure to take the proposed measures. They might face additional measures, including fines, or even withdrawal of their licenses.
Earlier this week, another three Cyprus-based brokers decided to terminate their UK operations. But it was not clear whether these companies gave up passporting rights voluntarily or under the pressure of the CySEC.
