While IronFX client withdrawal requests were on hold, many other companies replicated the delaying tactic.
In the final days of 2016, Finance Magnates brought a massive story to the spotlight after a copy of a certain document was obtained by yours truly. That piece of digital paper was the Annual Report of the Audit Office of Cyprus. It detailed how the Cyprus Securities and Exchange Commission (CySEC) handled the challenges it faced with a certain brokerage company.
The name of the CySEC licensed company is IronFX, and the document purported that the firm’s financial situation had deteriorated to the point where clients of the firm were owed €176 million. After a brief delay, the brokerage company reached out to Finance Magnates and stated that in fact the number cited in the Annual Report of the Audit Office of Cyprus was grossly inflated.
[gptAdvertisement]
Subsequent to the company's statement, it elaborated that it is in the process of addressing the situation and the treatment of the numbers by the Audit Office of Cyprus will be rectified.
Is the Precise Amount of Money Important?
In order to ascertain whether CySEC and IronFX have treated the interested parties fairly in this matter it is important to understand what the real issues in this case are. Did IronFX treat its clients fairly? Did CySEC treat clients of Cypriot brokerages and other Cypriot brokerages fairly?
Since the European Securities Markets Authority (ESMA) recently added to its Q&A for retail brokers a point explaining that client withdrawal requests should be repaid on the same or next business day, I would argue that undoubtedly, a large number of clients have not been treated fairly. Otherwise the supranational regulator would not be addressing this issue separately and highlighting it in its Q&A document.
We have seen numerous clients complaining for years, and from legal case to legal case, outcomes are different.
The precise amount of money that IronFX owes to clients is of course quite important. We have been deeply analyzing the situation ever since it started to unfold and in our view, there have been some bonus abusers. However the evidence suggests that it was not only these clients that were prevented from withdrawing their money from IronFX.
Finance Magnates has seen documents that suggest that IronFX has won some cases, particularly against Chinese clients where they have been confirmed as bonus abusers and have relinquished their claims. We have also seen documents that confirm that clients of the brokerage have had to resort to legal proceedings in order to get their funds back.
Has CySEC Failed at Supervising the Industry?
The issue at hand is that brokers regulated by CySEC pay a fee to get regulated. In return for this fee and for employing staff in Cyprus, and paying taxes in a country where the financial services industry is a bright light of hope for the economy, the Cypriot authorities need to do their job properly and adequately supervise all companies on the island.
Creating a level playing field has been quite an important aspect for the financial services industry and this is why regulatory action in this sphere is widely adopted. There is barely any country in the world that doesn’t have financial Regulation. Whenever any company in any country fails to adhere to this regulation, other companies from the industry start to suffer.
When supervision fails, the end result is moral hazard - a company gains a competitive edge over other companies
When supervision fails, the end result is moral hazard - a company gains a competitive edge over other companies and starts to abuse its position. Did this happen with IronFX? This is up to the reader to decide, as a lot of evidence on the case has been presented.
One thing is clear - CySEC’s inappropriate timing on this case has stimulated other companies from the industry to abuse their position. Clients of various brokerages that have failed under the supervision of CySEC have been affected. Many are yet to receive their funds and a number of them cannot afford to take legal action.
If the Cypriot supervisor is to continue with its soft approach, that does not offer protection to clients, the Cypriot brokerage industry may suffer more. The Investor Compensations Fund (ICF), that is supposed to warrant the disbursement of insured deposits for up to €20,000, may run out of cash.
When it does, it is the regulated brokerages that are going to pay the bill.
In the final days of 2016, Finance Magnates brought a massive story to the spotlight after a copy of a certain document was obtained by yours truly. That piece of digital paper was the Annual Report of the Audit Office of Cyprus. It detailed how the Cyprus Securities and Exchange Commission (CySEC) handled the challenges it faced with a certain brokerage company.
The name of the CySEC licensed company is IronFX, and the document purported that the firm’s financial situation had deteriorated to the point where clients of the firm were owed €176 million. After a brief delay, the brokerage company reached out to Finance Magnates and stated that in fact the number cited in the Annual Report of the Audit Office of Cyprus was grossly inflated.
[gptAdvertisement]
Subsequent to the company's statement, it elaborated that it is in the process of addressing the situation and the treatment of the numbers by the Audit Office of Cyprus will be rectified.
Is the Precise Amount of Money Important?
In order to ascertain whether CySEC and IronFX have treated the interested parties fairly in this matter it is important to understand what the real issues in this case are. Did IronFX treat its clients fairly? Did CySEC treat clients of Cypriot brokerages and other Cypriot brokerages fairly?
Since the European Securities Markets Authority (ESMA) recently added to its Q&A for retail brokers a point explaining that client withdrawal requests should be repaid on the same or next business day, I would argue that undoubtedly, a large number of clients have not been treated fairly. Otherwise the supranational regulator would not be addressing this issue separately and highlighting it in its Q&A document.
We have seen numerous clients complaining for years, and from legal case to legal case, outcomes are different.
The precise amount of money that IronFX owes to clients is of course quite important. We have been deeply analyzing the situation ever since it started to unfold and in our view, there have been some bonus abusers. However the evidence suggests that it was not only these clients that were prevented from withdrawing their money from IronFX.
Finance Magnates has seen documents that suggest that IronFX has won some cases, particularly against Chinese clients where they have been confirmed as bonus abusers and have relinquished their claims. We have also seen documents that confirm that clients of the brokerage have had to resort to legal proceedings in order to get their funds back.
Has CySEC Failed at Supervising the Industry?
The issue at hand is that brokers regulated by CySEC pay a fee to get regulated. In return for this fee and for employing staff in Cyprus, and paying taxes in a country where the financial services industry is a bright light of hope for the economy, the Cypriot authorities need to do their job properly and adequately supervise all companies on the island.
Creating a level playing field has been quite an important aspect for the financial services industry and this is why regulatory action in this sphere is widely adopted. There is barely any country in the world that doesn’t have financial Regulation. Whenever any company in any country fails to adhere to this regulation, other companies from the industry start to suffer.
When supervision fails, the end result is moral hazard - a company gains a competitive edge over other companies
When supervision fails, the end result is moral hazard - a company gains a competitive edge over other companies and starts to abuse its position. Did this happen with IronFX? This is up to the reader to decide, as a lot of evidence on the case has been presented.
One thing is clear - CySEC’s inappropriate timing on this case has stimulated other companies from the industry to abuse their position. Clients of various brokerages that have failed under the supervision of CySEC have been affected. Many are yet to receive their funds and a number of them cannot afford to take legal action.
If the Cypriot supervisor is to continue with its soft approach, that does not offer protection to clients, the Cypriot brokerage industry may suffer more. The Investor Compensations Fund (ICF), that is supposed to warrant the disbursement of insured deposits for up to €20,000, may run out of cash.
When it does, it is the regulated brokerages that are going to pay the bill.
Devexperts Checks Off Type 2 SOC 2 Audit for Enhanced Data Security
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
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▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
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Don't miss out on our latest videos, interviews, and event coverage.
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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