CySEC Withdrew ICF Membership of SonaFX and Belight Capital

Tuesday, 25/01/2022 | 13:17 GMT by Arnab Shome
  • Both the companies lost their CIF license last year.
  • The regulator offered up to €20,000 deposit protection to the clients of ICF members.
CySEC

The Cyprus Securities and Exchange Commission (CySEC) announced on Tuesday that it has withdrawn the Investors Compensation Fund (ICF) membership of SonaFX operator Sonaf Business and Belight Capital Group.

Under the ICF membership, the financial market regulator is providing up to €20,000 protection for the deposits of every client of regulated financial services companies. However, the membership is of no use if the companies are not regulated by CySEC anymore.

The Cyprus Investment Firm (CIF) licenses of both these companies were withdrawn last year.

“It is noted that, in accordance with paragraph 6(3) of the Directive, the loss of ICF membership status does not mean loss of rights of covered clients to receive compensation in relation to investment operations carried out until the loss of membership status, if the conditions for compensation are fulfilled pursuant to the Directive, nor does it obstruct the initiation of the compensation procedure for covered clients,” the regulator stated.

Two Redundant Brokers

Though the regulatory license of Sonaf was voluntarily renounced by the company, Belight Capital was accused of multiple violations of local regulations.

Belight Capital is a foreign exchange broker operating with its Cypriot license. Its CIF license was first suspended by Cypriot watchdog in April 2020, only to impose a total cancellation in September 2021.

Among other violations, the regulator pointed out that Belight did not provide any investment services for at least six months prior to the initial suspension of its license, which is a mandatory requirement.

Cyprus is home to many financial services companies, all of which come under the supervision of CySEC. Over the years, the regulator has become strict and is actively monitoring the activities of the companies under its supervision and in extreme cases have suspended or withdrawn the licenses of the companies.

The Cyprus Securities and Exchange Commission (CySEC) announced on Tuesday that it has withdrawn the Investors Compensation Fund (ICF) membership of SonaFX operator Sonaf Business and Belight Capital Group.

Under the ICF membership, the financial market regulator is providing up to €20,000 protection for the deposits of every client of regulated financial services companies. However, the membership is of no use if the companies are not regulated by CySEC anymore.

The Cyprus Investment Firm (CIF) licenses of both these companies were withdrawn last year.

“It is noted that, in accordance with paragraph 6(3) of the Directive, the loss of ICF membership status does not mean loss of rights of covered clients to receive compensation in relation to investment operations carried out until the loss of membership status, if the conditions for compensation are fulfilled pursuant to the Directive, nor does it obstruct the initiation of the compensation procedure for covered clients,” the regulator stated.

Two Redundant Brokers

Though the regulatory license of Sonaf was voluntarily renounced by the company, Belight Capital was accused of multiple violations of local regulations.

Belight Capital is a foreign exchange broker operating with its Cypriot license. Its CIF license was first suspended by Cypriot watchdog in April 2020, only to impose a total cancellation in September 2021.

Among other violations, the regulator pointed out that Belight did not provide any investment services for at least six months prior to the initial suspension of its license, which is a mandatory requirement.

Cyprus is home to many financial services companies, all of which come under the supervision of CySEC. Over the years, the regulator has become strict and is actively monitoring the activities of the companies under its supervision and in extreme cases have suspended or withdrawn the licenses of the companies.

About the Author: Arnab Shome
Arnab Shome
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About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6404 Articles
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