Breaking: MFSA to Cancel License of FX-CAM over Alleged Breaches

Malta's financial markets watchdog alleges breaches by the company formerly known as Sensus Capital Markets Ltd.

According to a post updated by the regulator this Thursday morning at 6:52am local time, the Malta Financial Services Authority (MFSA) has issued a decision dated March 8th 2016 to cancel the Category 2 Investment Services License of FX-CAM Consulting and Advertisement LTD, formerly known as Sensus Capital Markets Ltd (Sensus), pending an appeal period that the company is entitled to.

If a successful appeal isn’t made within said period, the license will be canceled. The time-frame for the appeal has yet to be divulged publicly.

The MFSA-regulated entity has its registered office in Malta at the Vision Exchange Building in Birkirkara and has been registered since 2012 with a Category 2 license, according to the update from the regulator.

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According to sources, there isn’t a single client or customer’s equity left at the firm for over six months already, after the company had given clients the option to withdraw or transfer to another preferred broker, which is believed to be based in Cyprus and CySec regulated. Finance Magnates has previously covered news related to the Malta entity’s organizational structure.

Activities Beyond Scope of License

The update from the MFSA said that FX-CAM Consulting and Advertisement LTD – which the regulator continued to refer to as Sensus despite that being its former name – was found in breach of numerous rules, citing Article 3(1) of the ISA and Standard Licence Condition for Investment Services Rules for Investment Services Providers and how Sensus was acting beyond its license by dealing on its own account when it was not licensed to do so, according to the MFSA.

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A long list of regulatory jargon and laws was cited by the MFSA in its publication, including SLC articles and rules related to conflicts of interests, the appointment of introducing brokers, breaches related to record keeping and retention of data, and breaches of general organizational requirements. In addition, the MFSA noted that the company failed to notify the regulator of some material information concerning the company, and it failed to submit annual audited financials and related paperwork within the allotted timeframes. On top of this, the MFSA said that Sensus breached rules in relation to the appointment of company officials, and also provided inconsistent information to the MFSA, including not updating it about its change of registered address.

The MFSA wrote: “Sensus engaged in these actions in a repeated and systematic manner and hence its infringements cannot be described as being isolated incidents.”

Statement to Follow

The Sensus brand name is similar to the brand Sensus Capital which operates with a CySEC license under GBE Brokers Ltd (ex GBE Safepay Transactions Ltd), which has been regulated in Cyprus for nearly two years, and which has management in Germany. According to Finance Magnates sources that entity has different shareholders and no common or indirect ownership despite the similar brand name (Sensus-Capital.com), as explained in our previous related coverage.

However, clients may have moved from the MFSA-regulated entity to this Cysec-regulated entity, and now the MFSA is taking action against its own entity even though no business may be left there.

Finance Magnates reporters reached out for comments around the time of publication and did not receive any statement, although the MFSA-entity may be preparing a statement according to people familiar with the news.

The list of allegations from the MFSA against the Malta-based entity, including administration related, has caused it to risk losing its license unless an appeal is successful. The firm is preparing to respond to the MFSA in order to resolve the issue as explained to Finance Magnates by people familiar with the story.

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