The Cyprus Securities and Exchange Commission (CySEC) has issued an announcement recapping the achievements of the regulator in 2015. The watchdog has highlighted that the increased efforts including on site checks led to a massive increase in the amount of fines collected which totaled €1.7 million ($1.9 million).
When the settlements which the regulator has reached with Cyprus Investment Firms are included the amount increases by €685,000 to a total of €2.65 million. CySEC has actively been engaging in more checks and balances throughout 2015, however a number of clients of brokers from the island are left pondering whether their interests are really looked after.
With risks of a big broker on the island going out of business, the challenges in front of the investor compensation scheme remain in place, and clients may not feel adequately protected. Some brokers have even resorted to securing alternative insurance schemes. To be fair, the practice is not unique to Cyprus, it has also been used by companies which are regulated by the UK Financial Conduct Authority.
While a number of companies have been sanctioned by the regulator, not many clients have been compensated for their losses due to the misconduct by a number of brokers operating from the island. With increasing pressure from the European Securities and Markets Authority, a number of binary options and forex brokers have been investigated by CySEC.
Binary Options Brokers Likely to Be in Focus
With the number of complaints against Cyprus regulated binary options brokers reaching an extraordinary amount, the watchdog was forced to embark on a slew of investigations involving a large number of firms. CySEC has issued a list of special guidance rules for binary options brokers aiming to somewhat tighten its oversight over a number of controversial practices like short term binary options and bonus promotions.
The regulator has also urged CIFs to adopt a new set of rules for internal controls and issued guidance to prevent some abusive practices from being carried out in the future. However a big credibility issue remains – while its enforcement actions have been widely successful in filling up the government coffers, clients have been left behind.
NEXT BLOCK SOFIA 2.0 + Fabulous Blockchain After-PartyGo to article >>
Ongoing disputes and a number of clients unhappy with their CySEC regulated brokers have but one option to recover lost funds – turning to a local legal representative.
Interest in Obtaining Cyprus Regulation Unabating
The Chairman of CySEC, Ms Kalogerou, explained: “It is our belief that the operations carried out by CySEC in 2015, within the scope of its mandate, have been substantial and targeted, offering significant improvements in all areas of competence.”
hard work and collective effort are necessary in order to fully restore the credibility of Cyprus
As interest continued growing, so did the number of regulated companies. With 210 CIFs, CySEC could be struggling to adequately enforce the regulatory regime across all firms.
The regulatory standards on the island and European Union passporting have been the main points which continued to attract companies to become regulated.
“Ongoing this interest is indisputable proof that Cyprus continues to enjoy significant advantages and is an attractive investment destination. However, hard work and collective effort on the part of all stakeholders involved are necessary in order to fully restore the credibility of Cyprus,” Ms Kalogerou added.