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Glenn Stevens Trashes CySEC As Watchdog Goes After Bonuses

Recalibration of two brokers in the UK forex industry and various regulatory developments are included in this week's roundup.

The stories that made the most impact on the online financial trading industry over the past week included plans by one broker to regroup around the UK, while the clients of another British broker are still suffering the effects of the CHF crisis. Additionally, various regulatory developments and debates, such as the worth of CySEC regulations, make the headlines.

Cypriot Brokers Sign up Mickey Mouse

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On Monday, we reported that Glenn Stevens, the founder and chief executive officer of Gain Capital, told the British regulator in charge of the market, the FCA, that the client identification requirements (legally referred to as Know-Your-Customer) in other European jurisdictions were very limited compared to its procedures.

“I have even heard of people registering who were able to open and register accounts as Mickey Mouse and Kermit the Frog. Some of these firms’ version of KYC — know your customer — is such a light touch that they are letting customers go right through. That tells me they are not following the same rules that we are, checking customers’ source of funds and doing the sorts of suitability stuff the FCA wants.”

Admiral Markets around UK Branch

Also on Monday, Admiral Markets AS informed its Estonian and European customers that they could upgrade their service to the British arm of the group, Admiral Markets UK.

Retail customers have been offered three months to close their positions and to transfer the assets to the British jurisdiction under the terms of FCA. Admiral Markets AS says it will continue to serve all of its customers under the former agreement, but focusing its efforts on the development of institutional services.

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CySEC Warns on Bonuses

On Wednesday, the Cyprus Securities and Exchange Commission (CySEC) informed Cyprus Investment Firms (CIFs) about certain considerations when trading bonuses are issued to their clients.

According to the watchdog, all companies crediting so-called “trading benefits” to their customers have to meet certain criteria. The regulator highlights that a number of CIFs are not issuing bonuses in full compliance with the rules and regulations which are supposed to be enforced by CySEC.

AMF Blasts Forex

On Thursday, the French financial regulator, Autorité des Marchés Financiers (AMF), issued an announcement highlighting the results from a mystery shopping campaign, which it conducted on a number of binary options and forex trading websites.

While aiming to explain to the public the dangers of engaging in speculative trading, the AMF aimed to evaluate the code of conduct of companies offering binary options and forex trading. The mystery shopping campaign conducted in December 2014 aimed at evaluating the business practices of online trading sites targeting retail traders on the foreign exchange market or binary options.

Apology to Alpari UK clients

On Friday, the body responsible for ensuring the clients of Financial Conduct Authority (FCA) regulated brokers issued an apology for the delays for clients of Alpari UK.

The process of how the claims with the special administrators of Alpari UK will be aligned with the FSCS’s claims is still pending clarification. An official announcement about the matter is being planned for the end of the month. The communique states that KPMG is working closely with FSCS in order to determine the most efficient way to process the claims of Alpari UK clients.

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