Back in July, Forex Magnates reported that a record 17 firms had been granted financial licenses by Cypriot securities regulator, CySec. The rise in authorized firms occurred even as the country was in the midst of dealing with a banking crisis. Among the firms, much of the demand was coming from binary options brokers.
However, we are now seeing accepted firms decide to rethink their Cypriot plans. Among the class of 17, including Monex Capital Markets. Part of the Indonesian Monex Investido Futures, the broker last week launched its European initiative in the UK, waiting to receive FCA regulation instead of going live from Cyprus.
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Similarly, CySec has announced that Master Capital Group and Profitside Investments, which had been granted regulation in the first half of 2013, have renounced their licenses. In terms of what led to the change, we reached out to Master Capital for comment, but as of publishing time were yet to hear from the company.
Although not uncommon for firms to initiate the process of regulation and then decide not to launch due to a variety of reasons, such as lack of funds or problems with accounting transparency, the current decisions may be linked to account issues Cypriot brokers are experiencing. As reported yesterday, there has been a rise in occurrence of EU commercial banks rejecting brokers from opening accounts to hold client funds. In addition, any firm that had created accounts in Cyprus to meet regulatory requirements in the first half of 2013, was vulnerable to the bank haircut that occurred in the country.