The Cyprus Financial regulator CySEC has just informed the public that it handed down a suspension on the Cyprus Investment Firm (CIF) license of IGM Forex Ltd, according to a decision being made at the regulator’s last meeting.
IGM Forex, which holds registration number 309/16, had its license temporarily suspended after CySEC raised concerns over practices by the company, as well as its capital adequacy that the watchdog deemed potentially not compliant with regulatory standards.
In particular, the broker was initially flagged for non-compliance with section 28(1) of the Law which requires any CIF to “have its own funds, which are at all times more than or equal to the sum of its capital requirements.” This is in addition to an alleged violation of Article 92(1) of Regulation (EU) 575/2013 (Capital adequacy ratio).
CySEC imposed the punitive measures as the aforementioned violations may endanger the company’s clients’ interests or investor interests or generally the regular operation of the capital market.
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IGM Forex is obliged to take action within 15 days to comply with the necessary provisions then apply to reactivate their license once more. But while the license suspension is in force, the company is not permitted to enter into a business relationship with any person, accept any new customer or provide any services.
In addition, IGM Forex must, if existing clients so wish, close any open positions about clients’ contracts (on time or earlier if the client wishes so). It will also be required to return to existing clients all of their funds and profits earned, if and when the clients so wish.
In the meantime, IGM Forex has to upload notices regarding the suspension of its license onto all of its sites, though the company has yet to comply.
Finally, if the broker ultimately fails to fix the compliance issues set forth by CySEC, the regulator will trigger the procedure for the revocation of all the operation’s authorizations.