CySEC withdraws suspension of Libertex parent’s CIF license

abdelaziz Fathi

Following a series of fines and license suspensions, the Cyprus Securities and Exchange Commission (CySEC) has today cancelled its previous suspension of the CIF license of Indication Investments Ltd, the operator of FX retail brand Libertex.

CySEC

The Cypriot regulator said it’s now satisfied as the company has complied with regulatory obligations after adopting corrective measures to tackle suspicions of violations of the Investment Services and Activities and Markets Law 2007. CySEC also highlights that the decision about withdrawal of the CIF license suspension was taken on August 23.

In its Monday statement, the CySEC said Libertex operator has removed references to commission discounts it was offering for clients in languages other than English (including Dutch and Spanish).

Additionally, the regulator was seemingly worried about the company’s “give away” campaign and ordered to remove its related content from its website and social media channels. This was part of a far-reaching overhaul of the broker’s marketing policy and procedures, which includes a stricter approval process for advertising materials.

As part of the settlement with the CySEC, Indication Investments agreed to hire an independent expert to review its compliance program, on a continuous basis, upon the resumption of its activities.

As reported by FinanceFeeds in July, Indication Investments Ltd was initially flagged for non-compliance and had its license temporarily suspended by CySEC following several alleged violations. The initial suspension was reported as the watchdog considered these breaches could jeopardize the interests of broker’s clients or more generally the regular operation of the capital market.

More specifically, the Cypriot regulator referred to violations of legal provisions concerning the broker’s CIF authorization and organizational requirements.

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 ordered the company to take corrective measures within a set framework; otherwise, additional measures would be taken, such as the imposition of new fines and/or extending the suspension of their licenses.

Back in May 2020, the CySEC reached a settlement with Indication Investments Ltd, fining the firm €160,000 for violating the investment laws.

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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