The Cyprus Securities and Exchange Commission ( CySEC
CySEC
The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision and control of the Cyprus Stock Exchange as well as transactions executed in the Stock Exchange, its listed companies, brokers and brokerage firms.Furthermore, the regulator also supervises and monitors Licensed Investment Services Companies, Collective Investment funds, investment consultants. and mutual fund management companies.CySEC’s Role in Combatting Market AbuseOne of CySEC’s most important functions is the granting of operation licenses to investment firms, including investment consultants, brokerage firms and brokers. This includes provisions for Cyprus Investment Firms (CIF), who provide and perform investment services and activities either within Cyprus or abroad on a professional basis on certain financial instruments.Finally, CySEC oversees the imposition of administrative sanctions and disciplinary penalties to brokers, brokerage firms, and investment consultants, among others. The group has been a key force in policing the forex and binary options space, which has included several legal actions and curb market abuse. Since 2016, CySEC has sought to take a more aggressive stance against illicit behavior, while also strengthening its handling of investor complaints against entities. CySEC is currently chaired by Demetra Kalogerou, who has held the role since 2011.The CySEC is administered by a seven-member Board, which consist of the Chairman and Vice-Chairman, each of whom provide their services on a full and exclusive employment basis, and five additional non-executive members.All individuals on CySEC’s Board are appointed by the Council of Ministers following a proposal of the Minister of Finance. Their service reflects a five-year term.
The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision and control of the Cyprus Stock Exchange as well as transactions executed in the Stock Exchange, its listed companies, brokers and brokerage firms.Furthermore, the regulator also supervises and monitors Licensed Investment Services Companies, Collective Investment funds, investment consultants. and mutual fund management companies.CySEC’s Role in Combatting Market AbuseOne of CySEC’s most important functions is the granting of operation licenses to investment firms, including investment consultants, brokerage firms and brokers. This includes provisions for Cyprus Investment Firms (CIF), who provide and perform investment services and activities either within Cyprus or abroad on a professional basis on certain financial instruments.Finally, CySEC oversees the imposition of administrative sanctions and disciplinary penalties to brokers, brokerage firms, and investment consultants, among others. The group has been a key force in policing the forex and binary options space, which has included several legal actions and curb market abuse. Since 2016, CySEC has sought to take a more aggressive stance against illicit behavior, while also strengthening its handling of investor complaints against entities. CySEC is currently chaired by Demetra Kalogerou, who has held the role since 2011.The CySEC is administered by a seven-member Board, which consist of the Chairman and Vice-Chairman, each of whom provide their services on a full and exclusive employment basis, and five additional non-executive members.All individuals on CySEC’s Board are appointed by the Council of Ministers following a proposal of the Minister of Finance. Their service reflects a five-year term.
Read this Term) issued an announcement detailing that it has entered into a settlement agreement with IronFX Global. According to the document, the regulator has determined that there is a possibility that the company has been in violation of the legislative framework under which Cyprus Investment Firms operate.
The settlement agreement between CySEC and IronFX is for "reasonable suspicions of having committed possible infractions of the Investment Services and Activities and Regulated Markets Law of 2007."
According to official information from CySEC, "IronFX has exercised the right to seek a compromise agreement under a provision in the law which states that supervised entities have the right to request a compromise agreement and CySEC may proceed with such a compromise for any violation or possible violation, action or omission, for which there is reasonable suspicion that it was committed in violation of the existing legislation, as long as supervised entities chose to exercise this right."
The first point in the document released by CySEC, details possible violations in the Organizational requirements for Cyprus Investment Firms (CIFs).
The provisions of Section 18.2 of the law which the regulator cites as being taken into account when reaching the settlement follow below:
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 organisational 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 organisational 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
Regulation
Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges.
Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges.
Read this Term (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;
Bonus Conditions and Best Execution Practices
Another two possible violation counts were mentioned in the announcement made by the CySEC. The first is Section 36 of the law which states that a Cyprus Investment Firm (CIF) has to act honestly, fairly and professionally in accordance with the best interests of its clients when providing investment and ancillary services.
The point mentions several complaints of the company's clients wherein they allege that the brokerage hasn’t adhered to, in particular with the bonus policies of the company and attached conditions. In addition, the section of the law specifies that the marketing communication has to include all of the conditions attached to a particular promotion.
A number of IronFX's clients have been complaining that their funds have not been released by the company, while IronFX claims that the traders have abused the bonus system implemented by the brokerage.
The next section of the law mentioned in the announcement is Section 38, relating to best execution practices. According to the provisions in the law, “A CIF must take all reasonable steps to obtain, when executing orders, the best possible result for its clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.”
Apparently, this point was also identified by the regulator as a factor when making the decision to settle with IronFX. No information regarding pending client withdrawals has been provided by CySEC for the time being.
The Cyprus Securities and Exchange Commission ( CySEC
CySEC
The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision and control of the Cyprus Stock Exchange as well as transactions executed in the Stock Exchange, its listed companies, brokers and brokerage firms.Furthermore, the regulator also supervises and monitors Licensed Investment Services Companies, Collective Investment funds, investment consultants. and mutual fund management companies.CySEC’s Role in Combatting Market AbuseOne of CySEC’s most important functions is the granting of operation licenses to investment firms, including investment consultants, brokerage firms and brokers. This includes provisions for Cyprus Investment Firms (CIF), who provide and perform investment services and activities either within Cyprus or abroad on a professional basis on certain financial instruments.Finally, CySEC oversees the imposition of administrative sanctions and disciplinary penalties to brokers, brokerage firms, and investment consultants, among others. The group has been a key force in policing the forex and binary options space, which has included several legal actions and curb market abuse. Since 2016, CySEC has sought to take a more aggressive stance against illicit behavior, while also strengthening its handling of investor complaints against entities. CySEC is currently chaired by Demetra Kalogerou, who has held the role since 2011.The CySEC is administered by a seven-member Board, which consist of the Chairman and Vice-Chairman, each of whom provide their services on a full and exclusive employment basis, and five additional non-executive members.All individuals on CySEC’s Board are appointed by the Council of Ministers following a proposal of the Minister of Finance. Their service reflects a five-year term.
The Cyprus Securities and Exchange Commission (CySEC) is a financial regulatory authority of Cyprus. CySEC is one of the key watchdog authorities for brokerages in Europe, whose financial regulations and operations comply with the European MiFID financial harmonization law.Founded in 2001, CySEC is instrumental in providing licensing and registration for forex brokers and previously binary options providers.CySEC is responsible for a variety of different functions, which includes the supervision and control of the Cyprus Stock Exchange as well as transactions executed in the Stock Exchange, its listed companies, brokers and brokerage firms.Furthermore, the regulator also supervises and monitors Licensed Investment Services Companies, Collective Investment funds, investment consultants. and mutual fund management companies.CySEC’s Role in Combatting Market AbuseOne of CySEC’s most important functions is the granting of operation licenses to investment firms, including investment consultants, brokerage firms and brokers. This includes provisions for Cyprus Investment Firms (CIF), who provide and perform investment services and activities either within Cyprus or abroad on a professional basis on certain financial instruments.Finally, CySEC oversees the imposition of administrative sanctions and disciplinary penalties to brokers, brokerage firms, and investment consultants, among others. The group has been a key force in policing the forex and binary options space, which has included several legal actions and curb market abuse. Since 2016, CySEC has sought to take a more aggressive stance against illicit behavior, while also strengthening its handling of investor complaints against entities. CySEC is currently chaired by Demetra Kalogerou, who has held the role since 2011.The CySEC is administered by a seven-member Board, which consist of the Chairman and Vice-Chairman, each of whom provide their services on a full and exclusive employment basis, and five additional non-executive members.All individuals on CySEC’s Board are appointed by the Council of Ministers following a proposal of the Minister of Finance. Their service reflects a five-year term.
Read this Term) issued an announcement detailing that it has entered into a settlement agreement with IronFX Global. According to the document, the regulator has determined that there is a possibility that the company has been in violation of the legislative framework under which Cyprus Investment Firms operate.
The settlement agreement between CySEC and IronFX is for "reasonable suspicions of having committed possible infractions of the Investment Services and Activities and Regulated Markets Law of 2007."
According to official information from CySEC, "IronFX has exercised the right to seek a compromise agreement under a provision in the law which states that supervised entities have the right to request a compromise agreement and CySEC may proceed with such a compromise for any violation or possible violation, action or omission, for which there is reasonable suspicion that it was committed in violation of the existing legislation, as long as supervised entities chose to exercise this right."
The first point in the document released by CySEC, details possible violations in the Organizational requirements for Cyprus Investment Firms (CIFs).
The provisions of Section 18.2 of the law which the regulator cites as being taken into account when reaching the settlement follow below:
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 organisational 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 organisational 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
Regulation
Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges.
Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges.
Read this Term (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;
Bonus Conditions and Best Execution Practices
Another two possible violation counts were mentioned in the announcement made by the CySEC. The first is Section 36 of the law which states that a Cyprus Investment Firm (CIF) has to act honestly, fairly and professionally in accordance with the best interests of its clients when providing investment and ancillary services.
The point mentions several complaints of the company's clients wherein they allege that the brokerage hasn’t adhered to, in particular with the bonus policies of the company and attached conditions. In addition, the section of the law specifies that the marketing communication has to include all of the conditions attached to a particular promotion.
A number of IronFX's clients have been complaining that their funds have not been released by the company, while IronFX claims that the traders have abused the bonus system implemented by the brokerage.
The next section of the law mentioned in the announcement is Section 38, relating to best execution practices. According to the provisions in the law, “A CIF must take all reasonable steps to obtain, when executing orders, the best possible result for its clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.”
Apparently, this point was also identified by the regulator as a factor when making the decision to settle with IronFX. No information regarding pending client withdrawals has been provided by CySEC for the time being.