Following a decision that the regulator made at the end of last month, today the Cyprus Securities and Exchange Commission (CySEC) has announced that it has suspended the Cypriot Investment Firm (CIF) license for Pegase Capital Ltd. giving it one month to comply.
This follows after the regulator slapped Pegase with a 300,000 euro fine, a figure that is becoming more common for recent enforcement actions from CySEC.
Pegase Capital operates several brands under its now-suspended CIF license, including HelloBrokers, Interactive Option, and MTX Plus, through which it provided forex, CFD and binary options trading across these brands.
One Month to Comply
CySEC said the decision to suspend Pegase’s license was made due to the several alleged violations. It said that these suspected breaches of CIF rules could endanger clients’ interests.
Unless Pegase Capital takes action to comply with CySEC provisions within 30 days, it could see its license revoked.
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In addition, the announcement described how during the one-month probation, the firm cannot perform any investment activities or services, except if any of its existing clients want to close their open positions, yet only if the client chooses so of their own accord.
CySEC referenced a long list of applicable rules that it suspected the firm has potentially violated, applicable for CIFs, such as section 6(8) and section 28(1), and it stated that the firm was potentially non-compliant with regard to the condition of its authorization provided in section 12(1) of the Investment Services and Activities and Regulated Markets Law of 2007.
The regulator said that the rules applicable to the company’s management, including shareholders of the CIF, and other organizational requirements for people who effectively direct the CIF, as listed under rules 13(2) and 18(2)(a)(d)(j) , and applicable parts of Directive DI 144-2007-01 of 2012, were in question.
Following the last fine from CySEC and the measures the company was required to correct, the suspension that followed today means that the firm hadn’t been able to meet those corrective measures.
The issues seem to be related to AML controls under the Suppression of Money Laundering and Terrorist Financing Law, as the regulator takes steps that are part of a larger overhaul and aimed at medium to high-risk firms.
CySEC continues to step up its enforcement activity, as it aims to clean up any past transgressions from its CIF members, for the sake of upholding compliance and market integrity in Cyprus, for both forex, CFDs, and binary options brokers.