The Cyprus Securities and Exchange Commission (CySEC) announced on Wednesday that Bogofinance Capital Markets Ltd., which operated retail FX broker brand FXJet, is no longer a member of the Investors Compensation Fund (ICF).
The compensation scheme offered traders protection of up to 20,000 euros on their deposits with the broker in case of any default.
“The loss of ICF membership status does not mean loss of rights of covered clients to receive compensation in relation to investment operations carried out until the loss of membership status,” the regulatory notice stated, adding, “if the conditions for compensation are fulfilled pursuant to the Directive, nor does it obstruct the initiation of the compensation procedure for covered clients.”
This decision by the regulator came months after the brokerage operator shuttered its business renouncing its Cyprus Investment Firm (CIF) license at the end of last year.
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Bogofinance was established in 2006 in Lebanon by local businessman Joseph Boghos. It obtained a CySEC license in 2017 and rebranded itself to FXJet.
Though the reason behind the surrender of the broker’s license was not known, the regulator made it clear before that the decision was voluntary and not the result of any regulatory action.
In addition, the broker notified traders last year about its exit from the business and requested them to terminate all contracts. Under the regulatory rules, brokerages need to close their outstanding settlements and address all client complaints before they close down their business, providing confirmation from external auditors.
Meanwhile, many other Cypriot brokers, including the operators of Forex4group and 24Option, also withdrew their CIF licenses. Though Forex4group went into liquidation under unknown circumstances, 24Option-operator Rodeler was flagged by several European regulators for non-compliance.