Client Funds an Issue as Falcon Brokers Receives CySEC Suspension Letter
- For suspicion of violating rules regarding the handling of client funds, CySEC has announced that it is suspending Falcon Brokers' license.
The Cyprus Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term 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 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 Read this Term) has announced that they are suspending Falcon Broker’s broker-dealer license pending the correction of problems within the next month. The suspension notice was made due to what CySEC stated were “suspicions for an alleged violation of section 28(1) of the Law due to the Company’s possible non compliance with the authorization condition provided for in section 18(2)(i) of the Law (‘Operational requirements – Clients’ funds’).”
Co-Mingling Client Funds
While CySEC didn’t provide specific details of the potential violations, 18(2)(i) the Investment Services law states,“When holding financial instruments belonging to clients, to make adequate arrangements so as to safeguard clients' ownership rights, especially in the event of the CIF's insolvency, and to prevent the use of a client's instruments on own account except with the client's express consent.” As such, violating this rule would mean that Falcon Brokers is at fault for how they are handling client funds.
In order to prevent misappropriation of client funds, among regulations in place by major financial regulators are requirements for brokers to segregate customer assets into separate accounts. Failure to do such, and co-mingling customer assets with internal broker funds ultimately led to PFG’s owner’s ability to funnel out millions of dollars of client’s money. In regards to Falcon Brokers, the firm has been given one month to fix the alleged violations.
To learn more about CySEC’s suspicions, Finance Magnates reached out to Falcon Brokers for information, but as of publishing time, no one at the firm was available to comment.
The Cyprus Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term 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 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 Read this Term) has announced that they are suspending Falcon Broker’s broker-dealer license pending the correction of problems within the next month. The suspension notice was made due to what CySEC stated were “suspicions for an alleged violation of section 28(1) of the Law due to the Company’s possible non compliance with the authorization condition provided for in section 18(2)(i) of the Law (‘Operational requirements – Clients’ funds’).”
Co-Mingling Client Funds
While CySEC didn’t provide specific details of the potential violations, 18(2)(i) the Investment Services law states,“When holding financial instruments belonging to clients, to make adequate arrangements so as to safeguard clients' ownership rights, especially in the event of the CIF's insolvency, and to prevent the use of a client's instruments on own account except with the client's express consent.” As such, violating this rule would mean that Falcon Brokers is at fault for how they are handling client funds.
In order to prevent misappropriation of client funds, among regulations in place by major financial regulators are requirements for brokers to segregate customer assets into separate accounts. Failure to do such, and co-mingling customer assets with internal broker funds ultimately led to PFG’s owner’s ability to funnel out millions of dollars of client’s money. In regards to Falcon Brokers, the firm has been given one month to fix the alleged violations.
To learn more about CySEC’s suspicions, Finance Magnates reached out to Falcon Brokers for information, but as of publishing time, no one at the firm was available to comment.