Alvexo license suspension over, broker allowed to resume business
The Cyprus Securities and Exchange Commission (CySEC) has officially lifted the suspension of Alvexo’s operating license. This decision follows a series of fines and regulatory setbacks that had initially cast a shadow over the broker.
Alvexo’s parent, VPR Safe Financial Group, found itself in hot water after being flagged for non-compliance with the Investment Services and Activities and Regulated Markets Law 2007. CySEC temporarily suspended the company’s license amid concerns that it was not operating in accordance with Cyprus’ law, particularly regarding its marketing communications with clients.
The brand was also flagged for non-compliance with authorization conditions stated in many articles, which mainly concern the appropriateness of their products offered to certain client segments.
However, following months of corrective measures and actions taken by Alvexo, the Cypriot regulator is now satisfied with the company’s compliance efforts. CySEC has taken note of Alvexo’s compliance to rectify the violations that had led to the initial suspension, resulting in the lifting of the license freeze.
Per the regulator’s circular, the company met its obligations under Section 26(1) of the Law, ensuring that natural persons providing investment advice or information to clients on its behalf possess the necessary knowledge and skills to fulfill their duties.
The decision to withdraw the suspension of Alvexo’s CIF (Cyprus Investment Firm) license was made in 2021. Alvexo, regulated by CySEC, must adhere to Cyprus regulations to maintain its CIF trading license, which allows the broker to offer its services across Europe, as highlighted by the watchdog.
Alvexo faced multiple allegations of regulatory violations, which raised concerns about the interests of its clients and the integrity of the capital market operation. The investigation primarily revolved around VPR’s failure to comply with restrictions on the marketing, distribution, and sale of contracts for difference (CFDs) to retail clients. In addition to the license suspension, CySEC also imposed a fine of €100,000.
Alvexo, boasting nearly one million registered accounts, maintains its presence with offices in Cyprus and France. The lifting of the license suspension marks a turning point for the company, which can now refocus on its operations in the European market, having addressed the regulatory concerns that previously hindered its activities.
After several months of pause, the Cypriot regulator is once again flexing their muscles and actively finding compliance irregularities.
CySEC has also suspended several forex brokers that were caught up in promoting their risky products in the UK. The watchdog dropped the hammer after its UK counterpart said several brands including used fake celebrity endorsements for their products on social media.