Company behind CoverdealFX and Globtrex reaches €250,000 settlement with CySEC

Maria Nikolova

The settlement with Coverdeal Holdings Ltd concerns possible violations of the Investment Services and Activities and Regulated Markets Law of 2007.

The Cyprus Securities and Exchange Commission (CySEC) has earlier today published an announcement stating that it has reached a settlement with Coverdeal Holdings Ltd for possible violations of the Investment Services and Activities and Regulated Markets Law of 2007.

CySEC notes that, under article 37(4) of the Cyprus Securities and Exchange Commission Law of 2009, has the power to reach a settlement for any violation or possible violation, act or omission for which there is reasonable ground to believe that it took place in violation of the provisions of CySEC’s supervised legislation.

The settlement follows an investigation which involved assessing the company’s compliance with, amongst others:

  • 1. Section 6(8) of L. 144(Ι)/2007, regarding the provision of investment services that are stated in its authorisation.
  • 2. Section 28(1) of L. 144(Ι)/2007, according to which a Cyprus Investment Firm (CIF) must, at all times, comply with the conditions under which the authorisation was granted as laid down in Part III of L. 144(Ι)/2007 and in particular, with the conditions laid down in sections 15, 12(3), 18(2)(a) and 18(2)(j).
  • 3. Section 36, subsections (1) and (1)(a), of L. 144(Ι)/2007, relating to conduct of business obligations when providing investment and ancillary services to clients.

The settlement reached with the company is for the amount of €250,000.

According to the information on CySEC’s website, Coverdeal operates the following domains: www.coverdealfx.eu; www.coverdealfx.cz; www.coverdealfx.pl; www.coverdealfx.sk; www.globtrex.com.

The company is authorized to provide the following investment and ancillary services:

Investment Services

  • Reception and transmission of orders in relation to one or more financial instruments;
  • Execution of orders on behalf of clients.

Ancillary Services

  • Safekeeping and administration of financial instruments, including custodianship and related services;
  • Granting credits or loans to one or more financial instruments, where the firm granting the credit or loan is involved in the transaction;
  • Foreign exchange services where these are connected to the provision of investment services;
  • Ιnvestment research and financial analysis or other forms.

The settlement is announced as retail FX brokerages in Europe are now obliged to meet more stringent requirements with regard to CFD offering. The new ESMA rules introduce measures aimed at protecting investors. But the restrictions on CFD leverage have been met with mixed reactions.

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