Three Cyprus-based FX brokers decided to cease providing any investment services in the UK, the FCA said today. The list of outgoing brokers includes Maxiflex Ltd (trading as EuropeFX), Maxigrid Limited (trading as Dualix & AGM Markets), and Reliantco Investments Ltd (trading as UFX).
FortuneZ learned that it wasn’t the UK regulator who took the action, rather, the decision was based on notifications from their original regulator, CySEC.
“Existing UK account holders with open positions and/or cash balances should review notifications provided on the respective firms’ websites and/or firm communications to UK clients sent by email or available at account log-in. The firms should clearly set out the process and timelines for their ongoing interactions with their existing UK-based customers,” the FCA said.
Whether these brands voluntarily turned their backs to the UK market or were actually ordered by the CySEC to give up their passporting rights, is yet to be confirmed.
However, EuropeFX CEO Keith Ioakim confirmed to FortuneZ that it was his company’s decision to stop onboarding and soliciting new UK clients as of June 4, citing “uncertainty of the markets and ongoing developments.” He added that EuropeFX proceeded with the necessary notifications with the relevant regulatory authorities.
“This decision was not taken easily or light-heartedly, as our existing UK clients are very important to us and we value and acknowledge their loyalty to us and our brand. It must also be admitted that the UK market is a very lucrative and well – respected market. However, and in any case, this does not mean that we will abandon our existing UK clients. We will continue to offer them the quality of service that they expect as we strive to deliver for so long, always in compliance with our regulatory and compliance requirements,” Ioakim concluded.
FCA takes away approvals of 4 brokers
Earlier this month, the FCA suspended the passporting rights of four Cypriot firms. At the time, the British watchdog barred the UK counterparts of Hoch Capital Ltd (trading as iTrader and tradeATF), Magnum FX (Cyprus) Ltd (trading as ET Finance), Rodeler Ltd (trading as 24option) and F1Markets Ltd (trading as Investous, StrattonMarkets and Europrime).
These firms had their UK approvals lapsed, in whole or in part, after an investigation found Britons were being offered high risk contracts for difference (CFDs) using fake celebrity endorsements on social media. The watchdog, however, did not reveal the names of the celebrities used in the fake endorsements.
The City regulator also said these firms failed to pay money owed to investors and charged customers undisclosed fees whilst failing to disclose the risks of trading CFDs.
The FCA told these brands that they are no longer allowed to solicit or take on new clients from the country anymore, while relations with the existing clients must be terminated, and they must be allowed to close their positions and withdraw their funds.
Although the Cysec didn’t announce any details yet about the new list of lesser known brands, it has partially suspended license of those hit earlier until they take corrective measures within a set framework; otherwise, additional measures will be taken, such as the imposition of fines and/or even the withdrawal of their licenses.