CySEC Urges Brokerages to Stop Providing Services to Belgian Residents

CySEC is cautioning firms to limit access to traders from Belgium following the recent regulatory shakeup.

In the aftermath of Belgium’s ban on over-the-counter (OTC) foreign exchange (FX), contracts-for-difference (CFDs) and binary options, the Cyprus Securities and Exchange Commission (CySEC) issued a notice to Cyprus Investment Firms (CIFs) to comply with the regulatory changes, which will come into effect on August 18, 2016, per a CySEC filing.

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The move follows an ongoing situation in Belgium, which pitted the country’s market watchdog, the Financial Services and Markets Authority (FSMA) against a bevy of scandals and illicit operations. The litany of warnings against unauthorized firms soliciting clients in its jurisdiction eventually prompted the regulator to act, with the Belgian government opting to completely ban retail online trading in FX, binary options, and CFDs.

As such, CySEC has urged CIFs to immediately stop providing financial services to Belgian residents. The ban will apply to OTC derivatives and not to trading on a regulated exchange or on a multilateral trading facility, which is designed to supplement a Belgian distribution ban that was already in force for certain products, such as financial products with Bitcoin or other cryptocurrencies as their underlying.

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