iTrader parent loses CIF licence after two-year spat with FCA, Consob and CySEC

abdelaziz Fathi

Following other FX brokers’ decisions to renounce their authorisation in Cyprus, the island’s Securities and exchange commission today said it has withdrawn the license of Hoch Capital Ltd (trading as iTrader and tradeATF).

The announcement was made nearly two years after the Cypriot broker suspended its operations and renounced the CIF authorization.

Hoch Capital was among a handful of Cypriot brokers that the UK’s FCA suspended their passporting rights. At the time, the British watchdog also barred the UK counterparts of Maxigrid Limited (trading as Dualix & AGM Markets), Magnum FX (Cyprus) Ltd (trading as ET Finance), Rodeler Ltd (trading as 24option) and F1Markets Ltd (trading as Investous, StrattonMarkets and Europrime).

The Financial Conduct Authority alleged that the companies were using fake celebrity endorsements for promoting their products on social media. The City regulator also said these firms failed to pay money owed to investors and charged customers undisclosed fees whilst failing to disclose the risks of trading CFDs. Its Cypriot counterpart had then taken notice and dropped the hammer on all these brands, having partially suspended their licenses for one month until they take corrective measures.

Shortly after the FCA’s crackdown, these firms voluntarily turned their backs to the UK market and decided to cease providing any investment services to Britons.

Hoch Capital was also hit by a €260.000 CySEC fine, which wrapped up a long-running regulatory spat that culminated in the company’s decision in July 2020 to renounce its Cyprus Investment Firm (CIF) license. At the time, CySEC explained that the settlement resolves allegations of non-compliance with several articles that cover multiple regulatory requirements, including conflicts of interest and information provided to clients.

Earlier in 2020, the Italian regulator also flagged a broker-dealer platform operated by Hoch Capital. According to Consob, the Cypriot intermediary continued to break laws even after the watchdog sent several complaints to its original regulator, Cysec, about its misconduct. The claims refer to non-compliant practices made by the brand’s operator, including promoting the contracts for difference (CFDs) to non-professional investors.

Moreover, the Cyprus broker violated the EU directive that mandates negative account protection, ensuring that customers cannot lose more than their trading stake. Furthermore, the Consob accused their staff of exercising pressures on their clients to deposit more funds, though the current rules forbid bonuses and other incentives that may have encouraged overtrading in recent years.

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