101investing excluded from CySEC investor compensation scheme
The Cyprus Securities and Exchange Commission (CySEC) announced that FXBFI Broker Financial Invest Ltd, trading as 101investing, along with three other brands, has been excluded from its investor compensation fund today.
Fortunately, the clients of these brands are still entitled to benefit from the Investor Compensation Fund (ICF), which serves to protect the claims of covered clients and provide them with compensation in case a member could not meet its financial obligations.
The island’s top watchdog further explains to the public that “in accordance with paragraph 6(3) of the Directive, the loss of ICF membership status does not mean loss of rights of covered clients to receive compensation in relation to investment operations carried out until the loss of membership status, if the conditions for compensation are fulfilled pursuant to the Directive, nor does it obstruct the initiation of the compensation procedure for covered clients.”
Earlier in June, CySEC ordered FXBFI to pay €50,000 for violating the Investment Services and Activities and Regulated Markets Law. Also in August 2022, the watchdog imposed a substantial administrative fine of €150,000 in a separate regulatory action. At the time, CySEC explained that the penalty resolves allegations of non-compliance with regulatory requirements, including conflicts of interest and information provided to clients.
In addition, FXBFI was probed by Cysec for lack of compliance with regulatory requirements that govern the assessment of suitability and appropriateness of clients, as well as its obligation to execute orders on the most favourable terms to their customers.
The regulator often kickstarts the compensation payment procedure after it revokes the authorization of a company that is not expected to pay back its obligations in the near future.
The next step, if any, will see the ICF inviting covered clients to make their claims against the companies in questions, designating the procedure for filing compensation applications and the deadline for their submission. Next, the fund publishes the details in at least two local newspapers, including the address at which investors may be informed about the progress of their applications.
The amount of the compensation payable to each client is calculated in accordance with the contractual terms governing his relationship with the faltering broker, but in general, the maximum amount does not exceed €20.000.