CySEC Suspends ‘in whole’ CIF License of Maxiflex Ltd (EuropeFX)
The Cyprus Securities and Exchange Commission (CySEC) today said it has wholly suspended the Cyprus Investment Firm (CIF) License of FX retail brokerage firm Maxiflex Ltd (trading as EuropeFX).
The Cypriot watchdogs didn’t provide a breakdown or specific details for the regulatory action but said its decision was taken based on possible violations of the investment laws.
In particular, Maxiflex was flagged for conducting business or facilitating some activities not stated in its authorisation. Cypriot CIFs need to notify CySEC when they are providing their services in third countries. Before they can deliver their product in a given country, they need to get appropriate authorisation from the country’s regulatory authorities first.
EuropeFX was among a handful of Cypriot brokers that the UK’s FCA suspended their passporting rights last year. At the time, the British watchdog also barred the UK counterparts of Hoch Capital Ltd (trading as iTrader and tradeATF), Magnum FX (Cyprus) Ltd (trading as ET Finance), Rodeler Ltd (trading as 24option) and F1Markets Ltd (trading as Investous, StrattonMarkets and Europrime).
Shortly after the FCA’s crackdown, EuropeFX voluntarily turned their backs to the UK market and decided to cease providing any investment services to Britons.
Meanwhile, the CySEC statement announcing the license suspension further reads that EuropeFX parent does not appear to comply with the authorisation conditions concerning “suitability of members of the management body or shareholders,” and other organisational requirements.
The Cyprus watchdog reached a settlement with Maxiflex in 2020, ordering the firm to pay €370,000 for violating certain authorisation conditions. At the time, CySEC has explained that the settlement resolves allegations of non-compliance with other articles that cover multiple regulatory requirements, including conflicts of interest and information provided to clients.
In addition, MAXIFLEX LTD 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.
CySEC ordered the company to take corrective measures within a set framework; otherwise, additional measures will be taken, such as the imposition of new fines and/or even the withdrawal of their licenses.