17 November, 2015 | AtoZ Forex – Since August, Cypriot regulator CySEC announced to commence the investigation on IronFX Global for infringements of CySEC Legislation. After hundreds of traders on various Forex forums claimed to be unable to withdrawal any funds with the leading Forex Broker IronFX. Finally the everlasting CySEC investigation of IronFX Global Ltd has an update.
Now, months after CySEC’s decision to place IronFX under close scrutiny, the regulator has released a board decision upon the case, along with disclosing numerous of other fines and penalties on leading CIFs. The announcement comes from the local regulator that IronFX is to pay €335,000 to CySEC as a settlement, based on the violation of the legislative framework for CIFs
Questionably low settlement
As what can be seen from the official release, the Cypriot regulator disclosed no specific information in English but kept it mostly in Greek on the case of IronFX Global. Keeping the troubled traders of IronFX with withdrawal issues still in the dark.
For many, the CySEC settlement of €355,000 with the major broker comes as surprise, considering limitless complaints we have received in line with CySEC and other industry leading media sources about presumed wrongdoings of IronFX under CySEC regulation. Hence, today’s announcement only inserts more confusion among the disgruntled traders of IronFX.
IronFX CySEC Settlement Legal Background
The settlement announcement of CySEC with IronFX is based on “reasonable suspicions of having committed possible infractions of the Investment Services and Activities and Regulated Markets Law of 2007″.
The following are the provisions of the Section 18.2 of the Investment Services and Activities and Regulated Markets Law of 2007 which IronFX has violated according to CySEC:
1- Establish adequate policies and procedures sufficient to ensure its compliance, including its managers, employees, tied agents and other relevant persons, with its obligations pursuant to this Law and the directives issued pursuant to this Law, as well as appropriate rules governing personal transactions by such persons;
2- Maintain and operate effective organizational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest as stated in section 29 from adversely affecting the interests of its clients;
3- Take reasonable steps to ensure continuity and regularity in the performance of investment and ancillary services and activities, by employing appropriate and proportionate systems, resources and procedures;
4- Ensure, when relying on a third party for the performance of investment services or activities or operational functions which are critical for the provision of continuous and satisfactory service to clients and the performance of investment activities on a continuous and satisfactory basis, that it takes reasonable steps to avoid undue additional operational risk. Outsourcing of the above must not be undertaken in such a way as to materially impair the quality of its internal control and the ability of the Commission to monitor the CIF’s compliance with all its obligations;
5- Have robust governance arrangements which include a clear organizational structure with well defined, transparent and consistent lines of responsibility;
6- Have sound administrative and accounting procedures, internal control mechanisms, effective procedures for assessing the risks the CIF undertakes or may undertake, and effective control mechanisms; including appropriate administrative and accounting procedures and safeguard arrangements for information processing systems;
7- Arrange for records to be kept of all services provided and transactions undertaken by it, which shall be sufficient to enable the Commission to monitor compliance with the requirements under this Law, the directives issued pursuant to this Law and the Regulation (EC) No 1287/2006, and in particular to ascertain that the CIF has complied with all its obligations with respect to clients or potential clients;
8- To apply appropriate client identification procedures, record maintenance and internal reporting as provided by the Prevention and Suppression of Money Laundering Activities Law and by directives issued pursuant to the said Law or/and to section 20 of this Law;
It appears that the above given case focuses on the issues the company had with their IBs and Affiliates, however this is not the full picture behind.