Latvian Financial Regulator Sends a Message to Cyprus Brokers

In a rare display of targeted communication toward specific brokerages, the Latvian financial regulator has teamed up with the Cyprus Securities and Exchange 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). The watchdog is sending a message to Cyprus Investment Firms (CIFs) outlining some provisions in Latvian law.

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A document sent by the Cypriot regulator to locally regulated brokerages says that the Financial and Capital Market Commission of Latvia (FCMC) only allows brokers that have a local representative office to operate in the country.

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The Latvian regulator needs to be notified by the CIF about the above.

CIFs Need to Oversee Any Marketing by Tied Agents

Another legal way that the regulator proposes for CIFs looking to provide services in Latvia is the use of local tied agents. Any illicit actions on the part of the intermediaries will incur civil liability on the CIF, since they are acting on its behalf.

While the provision under Latvian law has apparently been valid since 2011, starting from next year with the introduction of MiFID II more changes are due. Under the new EU-wide regulatory framework, tied agents will be allowed to hold Client Money Client Money Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Read this Term and every tied agent will only be allowed to partner up with one brokerage company.

Any marketing materials used by the tied agent are subject to inspection by the CIF. In addition the company needs to ensure that the tied agents are not targeting clients illicitly via direct advertisement or using the broker’s information to misled clients.

The CySEC advises CIFs to consult with a legal representative regarding the provision of their services in Latvia.