The Financial Commission has announced that it has discontinued the membership status of brokerage firm StarfishFX following a breach of contractual obligations.
November 7, 2018 | AtoZ Markets – The Financial Commission (FinaCom PLC), a self-regulatory body catering to the financial services industry, has announced on its website that it has permanently ceased the membership status of forex brokerage firm, StarfishFX.
Why StarfishFX Membership Was Terminated
According to the self-regulator, the termination was because of a breach of contractual obligations. FinaCom further explained that StarfishFX had not lived up to its contractual obligations as a member of the Financial Commission and was expelled for failures to pay its dues.
After it was given several warnings to rectify its shortcomings, FinaCom then decided that the company’s membership be discontinued starting from October 1st, 2018.
The Financial Commission has stated that member firms must strictly adhere to membership rules in order to maintain membership status. It further added that all members complying with regulatory rules and maintaining good standing are one amongst other prerequisites required for initial membership approval.
Will StarfishFX’s Clients Be Reimbursed?
In the meantime, the Commission has noted that it will be unable to process any fresh complaints from the clients of the brokerage firm, following its expulsion as of the date of this announcement and moving forward, or until StarfishFX regains its membership status.
Furthermore, StarfishFX’s clients will not qualify for reimbursement from Financial Commission’s compensation fund as a non-member. Nevertheless, StarfishFX was a Category A member of the Financial Commission. Hence, traders with this category membership can be eligible for the compensation fund that is up to €20,000 per complaint.
Moreover, clients of approved members have access to the ruling of the Commission’s Dispute Resolution Committee. The compensation fund is designed to act as an insurance policy, protecting members’ clients in exceptional cases.
Financial Commission Aims to Protect Customers
The expulsion of the firm from its membership is an important step that has added credibility to the Financial Commission and encourages existing companies that are already members to stick to the highest standards of operation.
Starfish FX is under the management of the group Starfish Markets Ltd., which is a multi-asset brokerage firm that offers trading of currencies, binary options, CFDs, and commodities. The group operates in New Zealand under the regulatory jurisdiction of Vanuatu in Oceania.
Earlier in February 2018, AtoZMarkets reported that the regulator had issued a warning from the investors’ community on its website, cautioning investors in Hong Kong against dealing with companies or any associations that are trying to impersonate the Financial Commission with the aim to defraud forex broker clients. The official announcement from FinaCom reads:
The Commission does not solicit or initiate communications with customers by “cold” emailing or calling – we communicate with customers only after receiving an inbound inquiry via our official website www.financialcommission.org. Customers should always use the Dispute Resolution Form located on our website at the following address to submit an inquiry.
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