XTrade’s license has been partially suspended for violation of marketing regulations, the Cyprus Securities and Exchange Commission has just announced. The news comes in tandem with a confirmation from sources close to Finance Magnates that the company suspended a number of employees in Israel.
The CySEC has outlined in its official announcement that the firm has violated regulations on disseminating marketing materials. XTrade’s license is so far only partially suspended, which means that the firm is not allowed to onboard any new clients. Existing clients of the company will remain unaffected.
The timing of the announcement is coinciding with the news that the brokerage laid off a number of employees in Israel. The CySEC has imposed strict restrictions on the use of call centers outside of the EU and outsourcing such activities.
The majority of the cuts to the Israeli office have been made from the European conversion and marketing departments (English, Spanish, Italian, French, Hungarian and Polish language desks). XTrade also recently opened a new office in Macedonia, a country which is not an EU member state and is also falling under the strict regulatory requirements by the CySEC.
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CySEC Getting More Vigilant
According to the official announcement, the CySEC has taken the decision on the 29th of May and has given the company one month to rectify its practices. The regulator has also highlighted that XTrade has not been able to control the compliance of its teams with marketing regulations.
“The marketing material disseminated by the company and/or its associates (affiliates/Introducing Brokers/Business Introducers – ‘associates’) does not seem to be fair, clear and not misleading. The company does not seem to have in place adequate policies and procedures sufficient to ensure its compliance with marketing material – considering its inability to control and monitor the marketing material that the Company and/or its associates disseminate,” the CySEC’s statement reads.
While the license of XTrade is partially suspended, the brokerage is not allowed to onboard new clients. The limitations are encompassing the company’s global business and mandate the company to put up an announcement about the license suspension on its website.
Finance Magnates has reached out to the company for a comment on the matter, but at the time of the publication hasn’t received an official reply.