Last year CySEC had imposed €138,000 fine to OptionRally and today CySEC suspended OptionRally’s CIF license.
13 July, AtoZ Forex Industry News - Based on 13 July CySEC announcement, CySEC has suspended the local Binary Options broker OptionRally Financial Services Ltd’s CIF license. While the circular does not clarify the exact reason, it appears that OptionRally was not following the EU best practices (AGAIN) about client funds protection as well as capital adequacy ratio.
- Section 28(1) of the Law, due to the Company’s possible non compliance, at all times, with all the authorisation and operating conditions in Part III of the Law and more specifically with section 18(2)(j) of the Law (protection of clients’ funds);
- Section 67 of the Law (own funds);
- Article 92(1) of the European Regulation (EU) 575/2013 (capital adequacy ratio)
CySEC suspended OptionRally’s CIF license
It appears that CySEC suspended OptionRally’s CIF license, giving the company one week to take the necessary action. In the meantime, the announcement indicates that the company can not carry out the following activities:
- Accepting new clients: OptionRally cannot accept new clients or enter into any new business relationships;
- Execution: OptionRally cannot receive, transmit or execute any orders from clients for buying any financial instruments;
- Investment services: OptionRally cannot provide nor perform any investment services in Cyprus or in the EU or in any other third country;
- Advertising: OptionRally cannot advertise itself as investment services provider
- Suspension announcement: The company should mention on all of its websites that CySEC suspended OptionRally’s CIF license
What will happen to the existing OptioRally traders?
According to the circular, if existing OptionRally traders wish the company should:
- Close all open positions in relation to clients’ contracts, or of its own, on their maturity date or on an earlier date if the client so wishes.
- Return to existing clients all of their funds and profits earned.
Is OptionRally reliable financial company?
In general, in case of noncompliance from any CIF, CySEC often would give one month notice period. From the structure of the CySEC’s OptionRally license suspension circular, it seems something has gone very wrong. The company has only one week to fix their issues, this is not very common.
However, in October 2016, CySEC had imposed a fine of total €138,000 to OptionRally Financial Services Ltd. for noncompliance. Seems like, the company just ignored the conditions or possibly had no other option. At the moment we can not confirm reasons yet.
Additionally, in May AtoZForex reported that IFCS of Belize cancelled OptionRally license. Neither did IFCS provide the details of the OptionRally license cancellation. However commented “non-compliance to some conditions of the annex attached to the license granted for trading in securities” as their decision-making factor.