The Cypriot financial regulator CySEC today said it has wholly withdrawn the Cyprus Investment Firm (CIF) license of Prior Capital CY Ltd (formerly PriorFx Ltd), according to a decision being made at the regulator’s last meeting.
According to the regulatory manifest, Prior Capital had its license lapsed after the CySEC raised concerns over practices by the company, as well as its management that the watchdog deemed potentially not compliant with regulatory standards. The regulator added that its investigation continues into the matters relating to the practices of Prior Capital.
In particular, the broker was flagged for non-compliance with section 22(1) of the Cypriot regulation as well as authorization conditions stated in section 17(9) of the Law, which mainly concerns organizational requirements and the security of clients’ funds. Of note, the company’s business model is seemingly orientated to institutional clients such as hedge funds, small brokers, professional pools of investors.
Prior Capital CY Ltd’s former brand, PriorFx Ltd, was previously fined €64,000 in 2017 over violations related to the compliance of its marketing material with the regulatory obligations. Although the CySEC at this time didn’t provide a breakdown or specific details for the regulatory fines, similar decisions often referenced lacking internal manual or records to assess how compliant are the broker’s marketing materials.
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A visit to the broker’s website reveals that Prior Capital CY has already proceeded with changes in its website to remove any references regarding authorization and supervision of the company by CySEC. It has posted the following notice on its website which dates back to the temporary suspension that Cysec handed down on its license back in March.
“DUE TO THE TEMPORARY SUSPENSION OF THE COMPANY’S LICENSE FOLLOWING THE DECISION OF CYSEC, PLEASE BE INFORMED THAT ALL OUR SERVICES ARE UNAVAILABLE UNTIL FURTHER NOTICE.”
The regulator will give the broker three months from that date to settle its obligations arising from the investment services that will be lapsed, during which time it remains under the Cypriot watchdog’s supervision.
Under the Cypriot regulatory framework, the company must return all outstanding balances to its clients and handle all of their complaints. In addition, Prior Capital must provide a confirmation from its external auditor that it does not have any pending obligations and must include details of each of the company’s clients.