CySEC Temporarily Suspends CIF License of Libertex Parent

abdelaziz Fathi

The Cyprus Financial regulator CySEC has just informed the public that it handed down a suspension on the Cyprus Investment Firm (CIF) license of Indication Investments Ltd, according to a decision made at the regulator’s last meeting.

Cyprus Investment Firm (CIF) Indication Investments Ltd is operating the CySEC-approved domain https://libertex.com and runs the FX retail brand Libertex.

The company had its license temporarily suspended after CySEC raised concerns over its practices that the watchdog deemed potentially not compliant with regulatory standards.

In particular, the broker was flagged for non-compliance with articles 22(1) regarding the conditions for CIF authorization and organizational requirements, as well as the article 25(1), which refers to acting “honestly, fairly and professionally when providing investment services to clients, in accordance with the best interests of the clients.”

The CySEC has also referenced ESMA’s temporary intervention powers as Indication Investments seemingly violated certain restrictions on the marketing, distribution, and sale of CFDs to retail clients.

In addition, the Cyprus watchdog said Indication Investments “does not appear to provide information, including marketing communications, to its clients or potential clients that is fair, clear and not misleading.”

CySEC imposed the punitive measures as the aforementioned violations may harm the company’s client interests or the regular operation of the capital market.

Indication Investments is obliged to take action within 45 days to comply with the necessary provisions then apply to reactivate their license once more. But while the license suspension is in force, the company is not permitted to enter into a business relationship with any person, accept any new customer, or provide any services.

In addition, Indication Investments must, if existing clients so wish, close any open positions about clients’ contracts (on time or earlier if the client wishes so). It will also be required to return to existing clients all of their funds and profits earned if the clients want to do so.

In the meantime, Indication Investments has to upload notices regarding the suspension of its license onto all of its sites, which in this case, has yet to take effect.

Back in May 2020, the CySEC reached a settlement with Indication Investments Ltd, fining the firm €160,000 for violating the Investment Services and Activities and Regulated Markets Law.

At the time, the regulator cited possible violations of several articles including those related the leverage limits offered to retail clients, as well as the margin close out rule on a per-account basis. The latter intended to standardize the percentage of margin (at 50% of the minimum required margin) at which providers are required to liquidate CFDs trades.

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