16 February, AtoZForex.com, Lagos – The Cyprus Securities and Exchange Commission (CySEC) has again clamped down on an investment firm discovered to be in violation of the code of conduct in matters regarding jurisdiction. ‘Trademarker (Cyprus) Ltd’, which operates CapitalOption and SkyFX is the company behind today's update. The Cypriot watchdog has suspended the SkyFX CySec license, increasing pressure on CIF entities not following guidelines.
Client risk
According to a statement from the Cypriot financial regulator, the firm's CIF license was suspended based on alleged violations of the law, leading to the company’s likelihood of "non-compliance at all times" with the condition of its authorization. These violations are very serious because they possibly endanger the best interest of the company’s client’s, and the general, smooth operations of the capital market. Two important standards which CySec primarily stands to protect. Hence, Trademarker is expected to take action to put its activities in order, so as to comply with the code of conduct within fifteen days from the date of the regulator’s decision to suspend their license.
As stated by CySec, while the suspension of the authorization is in force, the Company:
- Cannot provide/perform any investment services/activities, pursuant to section 26(5) of the Law.
- Must, if existing clients so wish, without being considered in violation of section 26(5) of the Law, close all open positions in relation to clients’ contracts, or its own, on their maturity date or on an earlier date.
- Return to existing clients all of their funds and profits earned.
Previous SkyFX fine
The firm has however gotten off the hook without receiving any fines from the regulator this time. Back in 2015, Skyfx was hit with a total of €20,000 in fines. This penalty was based on regulatory lapses under which the company was found to be at fault. Out of the €20,000 fine, half was levied based on the company’s violation of suitability of shareholders. The other half of the penalty was based on failure to comply with the regulations and the rules, in regard to outsourcing services to other countries like some marketing activities to Israel.
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