CySEC lifts suspension of FXGM parent’s CIF license
Following a series of license suspensions, the Cyprus Securities and Exchange Commission (CySEC) has today cancelled its previous suspension of the operating license of Depaho Ltd, which operates the retail FX brands GTCM, FXGM and TRADEAPP.
The Cypriot regulator said it’s now satisfied as the company has complied with regulatory obligations after adopting correctives measures and actions to tackle violations of the Investment Services and Activities and Regulated Markets Law 2007. CySEC also highlights that the decision recall the previous pause on the CIF license was taken yesterday.
Depaho is regulated by the CySEC and has therefore to comply with the Cyprus regulation in order to maintain its CIF trading license that enables the broker to offer its services across Europe, the watchdog stated.
The Depaho license was initially suspended on July 9, then the suspension was extended three times, most recently on October 22.
The action was taken as the CySEC suspected the broker of non-compliance with the authorization requirements and gave FXGM parent several deadlines to make adequate arrangements to comply.
In particular, Depaho was accused of providing investment advice without obtaining prior authorisation to do so. The company also had problem with its organizational requirements alongside lapses in implementing its conflicts of interest policy.
By extension, the regulator alleged that the company doesn’t understand the financial instruments it offers nor assesses the compatibility of these products to clients.
The CySEC also raised concerns over Depaho’s marketing practices as its clients were not able to understand the nature and risks of certain financial instrument the company recommends. Further, the broker was accused outsourcing its marketing activities to third parties and at times was misrepresenting the qualifications of its personnel to prospective clients.
Depaho Ltd is operating through its brand name FXGM and domain names www.depaho.com; www.fxgm.com; www.gtcm.com; www.tradeapp.com. Back in 2013, the company purchased the brand name FXGM and the domain name www.fxgm.com from FX Global Markets (FXGM), which in turn renounced its licence in the same year.
After several months of pause, the Cypriot regulator is once again flexing their muscles and actively finding compliance irregularities.
The 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.
Also earlier this year, the CySEC warned of fraudsters that are claiming to be representatives of the regulator in an attempt to solicit personal information from consumers and scam investors.