Turkey’s Capital Markets Board (CMB), the main financial regulatory and supervisory agency in the country, has blocked Turkish internet users from accessing MXTrade’s website. The action was taken following an investigation by the CMB that allegedly found that the broker was targeting clients in Turkey despite not having a local license to provide financial trading services.
The move against MXTrade comes after similar warnings from other European authorities. In September, Cyprus Securities and Exchange Commission warned that MXTrade is operating without a licence from it or any other EU regulator. A month before, Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) had issued a warning against the broker for soliciting clients without the proper authorization to do business. The CONSOB said it found that neither Lau Global Services Corporation, nor its brand MXTrade, are authorized to provide investment activities in Italy.
As this case demonstrates, Turkey has one of the most regimented forex markets in the world and the Turkish watchdog is also very vigilant. While other countries’ regulators usually just issue warnings and at most issue fines, the CMB actually blocks access to websites that it does not approve of. This paternalist approach may protect clients from trading with unregulated entities, in a way that is not possible in freer countries, but it also might lead Turkish traders to use VPNs to go around the country’s internet censorship system.
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Back in August the CMB levied a fine of nearly $30k against Isik Menkul Degerler, according to a CMB statement. Isik Menkul is a financial services provider, with a number of smaller subsidiaries, including IsikFX, its Turkish FX brokerage arm. The CMB imposed a $30,670 (TRY 89,628) fine against the Turkish company after the regulator took legal action following a violation of its Principles of Investment Advisory Activity.