The Cyprus Financial regulator CySEC has just informed the public that it handed down a suspension on the Cyprus Investment Firm (CIF) license of ‘Boursotrade Ltd’, which operates several brands, according to a decision being made at the meeting dated March 17, 2017.
Boursotrade Limited operates two forex and binary options providers. The first brand is BoursePro which is a regulated FX and CFDs brokerage firm operating as a subsidiary of BoursoTrade ltd and also registered in France to the “Authorité de controle prudentiel” (ACPR) of the Banque de France. The second brand is a binary options broker called Boursebinary, which operates through http://www.boursebinary.com. As of the time of publication, the binary options platform has taken down all website pages, but it’s not clear if the site was taken down as a result of the warning or leading up to it.
The regulatory action comes amidst a sustained crackdown on brokers operating in Cyprus, as the regulator is toughening up its stance towards forex, binary options and other trading activities, as well as recently putting very strict rules in place regarding all the bonus offerings. Following an announcement in November that the regulator is banning cash rewards that are tied to trading, the regulator appears to be broadening the scope of the ban.
Suspicions of alleged violations
Boursotrade Ltd, which holds registration number 235/14, had its licence temporarily suspended after CySEC raised concerns over practices by the company and its executives that the watchdog deemed potentially not compliant with its regulatory obligations.
In particular, the broker was flagged for non-compliance with section 28(1) of the Law which concerns persons who effectively direct its business, as well as an alleged violation of section 67 of the Law (the company’s funds), and Article 92(1) of the European Regulation 575/2013 (Capital adequacy ratio).
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Boursotrade Ltd is obliged to take action in order to comply with the necessary provisions within one month then apply to reactivate their license once more. But while the license suspension is in force, the company is not permitted to enter into a business relationship with any person, accept any new customer or provide any services.
In addition, Boursotrade Ltd must, if existing clients so wish, close any open positions in relation to clients’ contracts (on time or earlier if the client wishes so). It will be also required to return to existing clients all of their funds and profits earned, if and when the clients so wish.
In the meantime, Boursotrade has to upload notices regarding the suspension of its license onto all of its sites, though the company has yet to comply.
Finally, if the broker ultimately fails to fix the compliance issues set forth by CySEC, the regulator will trigger the procedure for the revocation of all the operation’s authorisations.