FXGM clears the air following CySec's fine
FXGM, which yesterday was handed a 25,000 euros fine by 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 decided to clear the air concerning the reasons for which it was fined. FXGM wasn't really accused of anything severe, just some regulatory processes which they should have followed better, but I'm glad that from time to time there are brokers who aren't afraid to admit that they've should have done better and are making the necessary changes.
1. Assessment of Client Compatibility
FXGM was treating all clients as retail, which has the effect of full protection on the client, since the client is considered not to have enough experience and knowledge. After CySEC's visit in our offices this was indicated to us and our client's questionnaire includes questions about knowledge and experience.
2. Internal Rule and Regulations
Again here since our company was categorizing every client as Retail, therefore there was no mention of the procedure to categorize our clients in our operations manual. After CySEC's visit and indication that this should have been included in our operations manual, the Company has proceeded with including this procedure in the new operational manual
This procedure is also explained in our client categorization document which a client accepts before opening an account with the company.
3. Segregation of Client’s Assets
At the time of CySEC’s inspection, the bank institution in which our company held the client's money, although was informed that this was a clients bank account, did not accept having "clients account" in the name of the account. Despite this not being obvious in the name of the Bank Account, all segregation of money was made in the Company's accounting books and records, so there was no doubt to whom the money belonged. After CySEC's visit the company proceeded immediately with changing the Bank that cooperates with and now all clients’ money are deposited in an account that indicates in its name that it is for clients. The Company feels that since the Bank was informed that this was clients’ money and all records appropriately shown that, that there was no danger in the money of the clients.
4. Provision of Credit
CySEC considered during their inspection that offering Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term to our clients was a form of credit/loan, a service which our company did not have license to offer. FXGM did not consider leverage to be a form of credit/loan but after CySEC's indication has proceeded with taking all necessary steps for acquiring the necessary license for providing these services to the clients.
FXGM, which yesterday was handed a 25,000 euros fine by 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 decided to clear the air concerning the reasons for which it was fined. FXGM wasn't really accused of anything severe, just some regulatory processes which they should have followed better, but I'm glad that from time to time there are brokers who aren't afraid to admit that they've should have done better and are making the necessary changes.
1. Assessment of Client Compatibility
FXGM was treating all clients as retail, which has the effect of full protection on the client, since the client is considered not to have enough experience and knowledge. After CySEC's visit in our offices this was indicated to us and our client's questionnaire includes questions about knowledge and experience.
2. Internal Rule and Regulations
Again here since our company was categorizing every client as Retail, therefore there was no mention of the procedure to categorize our clients in our operations manual. After CySEC's visit and indication that this should have been included in our operations manual, the Company has proceeded with including this procedure in the new operational manual
This procedure is also explained in our client categorization document which a client accepts before opening an account with the company.
3. Segregation of Client’s Assets
At the time of CySEC’s inspection, the bank institution in which our company held the client's money, although was informed that this was a clients bank account, did not accept having "clients account" in the name of the account. Despite this not being obvious in the name of the Bank Account, all segregation of money was made in the Company's accounting books and records, so there was no doubt to whom the money belonged. After CySEC's visit the company proceeded immediately with changing the Bank that cooperates with and now all clients’ money are deposited in an account that indicates in its name that it is for clients. The Company feels that since the Bank was informed that this was clients’ money and all records appropriately shown that, that there was no danger in the money of the clients.
4. Provision of Credit
CySEC considered during their inspection that offering Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term to our clients was a form of credit/loan, a service which our company did not have license to offer. FXGM did not consider leverage to be a form of credit/loan but after CySEC's indication has proceeded with taking all necessary steps for acquiring the necessary license for providing these services to the clients.