The Cyprus Securities and Exchange Commission (CySEC) is wholly withdrawing the license of Atlas Capital Financial Services. The company has two brands which it ran for a period of time before the firm’s license was suspended – neither brand (ACFX/ACFS) has been active since April 2016.
The news comes after numerous temporary license suspension notices by CySEC. The permanent retraction of authorization of the parent company of ACFX is not good news for clients.
Client Money Hole
According to the Cypriot regulator, the company did not hold sufficient funds in its coffers to adequately cover the deposits of its clients. CySEC said its statement that the company now has another three months to settle its obligations with its customers.
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Roughly a year after the first signs of trouble for ACFX surfaced, the company’s clients are still awaiting payment. The firm resorted to what has become a classic excuse for brokerages that are finding themselves short on client funds – arbitrage abuse.
CySEC has already identified that the firm did not operate in adherence with the country’s securities law. ACFX did not have established procedures to handle client complaints and it did not take all measures to ensure the continued and regular performance of its services.
In addition, the regulator’s investigation showed that CySEC was not in a position to establish whether the firm was maintaining adequate procedures to safeguard client assets. The details of the announcement point towards a lack of appropriate business records at ACFX.