Forex Trading: Why Avoid Brokers from St Vincent & The Grenadines

SVG FSA RegulatorFormed: November 12, 2012
Jurisdiction: St. Vincent and the Grenadines
Headquarters: Kingstown
Website: http://www.svgfsa.com/

Introduction to SVG FSA

Through an increasing demand to the financial sector and offshore zones itself, it was a need to create the Financial Services Authority with a responsibility to regulate non-bank, certain entities in the financial sector and control the international financial services industry in St. Vincent & the Grenadines.

The SVG FSA was established 7 years ago, November 2012, with a mission as the authority mentions on its official website, to develop, regulate and supervise St. Vincent and the Grenadines as a secure and competitive financial center in the international and the financial sector in accordance to best practices, through the promotion of integrated operation. However, the Forex Trading or Brokerage activity, which is the main topic in financial investment world also rapidly growing in its demand, does not have a solution of regulation of Forex, CFD and Binary Options in SVG.

The regulation or even licensing of the Forex business is not a part of the SVG FSA activity, as stated by the official warning.

“There are financial institutions out there that falsely claim they are registered or licensed in our jurisdiction. Their purpose for doing this is more than likely for illicit reasons and potential customers should be very cautious about conducting business with them.

FSA, St Vincent and the Grenadines. (Learn more about SVG FSA Function Role)SVG FSA website

In this St. Vincent and the Grenadines regulation review we cover the following highlights:

Why not trade with an SVG FSA registered broker?

St Vincent and the Grenadines of SVG is an island in the Caribbean, which became quite a known location for its tax haven offering out of the international companies. St Vincent is an attractive solution among the financial companies and those businesses that for the reason or another choose to operate through an offshore company. As the jurisdiction itself offers easy to achieve setup demands through very quick, simplified process, while the firm does not necessarily need an office in SVG, allowed to maintain low initial capitals, no strict establishment rules or requirements, yet allows running a global business. Furthermore, there is no sharp regulation or overseeing of the company operation implemented. In terms that the Forex business in SVG is not regulated in St Vincent, the SVG broker can run its activity, provide trading environments and accept forex payments through credit cards, but is not overseen.  

SVG FSA Forex Alert

Considering the fact that SVG FSA enables low set up requirements with No business planning, No management interview or check of the company background. While the registered company operates with No Handbook, No Regulatory Reporting, No Impose of Fines in case of its malicious service and there is No any protection implied alike Fund Segregation, Negative Balance Protection or Compensation in case of insolvency. The evident question is: Why to trade with SVG Broker?

Therefore, apart from beautiful seaside beaches, the SVG with its offshore environment became a known hub of financial firms, while the legal environment can be quite loose towards the Forex business and brokerage itself. For better understanding check out the UK’s FCA Authority and its sharp regulation, overseeing of the brokerages and heavy fines in case of the company fail to obligations.

FCA regulator

Obviously, the investment and trading service is a popular trend, however in order not to fall under the scams and frauds, which are in fact growing daily, you should carefully choose a company before any funding is done. The Forex and derivatives trading as a decentralized market can be a highly risky opportunity if the company delivers trading service without strict overseeing from the industry authority. For that reason, we always advise choosing among the most reputable and of course heavily regulated brokers and to protect yourself from potential scammers. For instance, as an example learn and compare eToro offering and heavy regulation. To get more knowledge, you can also read our article Forex Trading Scams and know how to protect yourself, with a deeper understanding of how frauds work.

In addition, most often an offshore broker alike SVG Brokers are associated with other companies while the offering varies slightly from the majority of frauds, yet the result is equally disappointing. The major concern about lack of regulatory oversight places SVG companies much under the recommended safety line, in essence, you only get the honest word of the company.

Complaints and scams to SVG FSA

We have received many user reviews, while the majority of them are obviously negative. What are the Complaints about? Rejects client withdrawal, meaning a client who puts money cannot get profits or funds back.

In that scenario, SVG FSA will not be able to assist through customer protection, to advise or take action further, the trader stands completely alone at that point. Therefore, there is no way to complain or receive any support from the authority.

SVG complaints and support

In addition, there are many fake brokers stating their address, regulation or registration at SVG, while pretending to be a legit firm. The SVG authority recognized that potential and warns potential or already engaged traders that in case of trading with an unlicensed and unregulated company the trader using the services at his own risk. As an unlicensed or offshore broker most often not subject to any supervision of practice or regulatory laws the company may easily mislead or false any information or the service providing itself.

The only way the SVG FSA tries its attempt to protect clients is to place an advise and list entities at the alert area as of the false license claims in the SVG jurisdiction, yet the protection “actions” are ending just by that. SVG FSA – Investor Alerts 

SVG FSA Investor Alert

List of St Vincent and the Grenadines Forex Brokers

Currently, we have reviewed many Forex Brokers from St. Vincent and the Grenadines, while none of them were included into the list of trusted or brokers with a recommendation of safe trading. The only companies that may be trusted are those brokerages that hold additional licenses from the reputable authorities and at the same time run business in SVG. Check on the broker carefully before any signing in is done, revise the broker’s regulation status, its authorization claims, news and reputation by reading reviews and checking on the legit documentation.

As well, you can find and verify company at the regularly updated list of Brokers to avoid or submit your inquiry. Then if you found a broker at the list you better stay away from any cooperation or trading with them at all cost, as listing consists of mainly non-regulated and offshore firms.

Conclusion on SVG regulation

The final thoughts conclude the traders and investors should ensure a clear understanding of the procedures and risks involved while the company or another offering the forex trading opportunity and not properly licensed.

As of the recent growth of international trend of Forex, trading investors are urged to exercise caution before any sign in or acceptance of the offering. Any broker declares its regulation by FSA SVG, in substance, made a false claim. As it became clear now, why the SVG incorporated firms disclose information on the risks, in particular, the possibilities of loss, therefore we recommend avoiding offering from the brokers mentioning their SVG FCA regulated status. In order to become a trustable company in providing financial and trading service, the firm should be sharply regulated and retain a sufficient level of reputation through its operational history. Definitely, it is not a gaining point towards trust to the brokerage that is an offshore based company and was established with a low registration requirement while none of the protective principles followed.

The security of funds always stands first, therefore, you better consider brokerages from other jurisdictions that maintain a sustainable level of financial and investment services and forex trading in particular through a protective set of rules. Check out the list of regulated and recommended brokers by the link.

Spanish CNMV warns of WiseFunds and Just Perfect Markets

Spain’s financial markets and services regulator CNMV has issued warnings against two forex brokers WiseFunds and Just Perfect Markets. According to the public warning notices, these entities are not authorized to provide investment services or investment advice and auxiliary services, including foreign currency transactions in Spain.

The National Securities Market Commission (often abbreviated as CNMV) is the Spanish government agency responsible for the financial regulation of the securities markets in Spain. It is an independent agency that falls under the Ministry of Economy, Industry, and Competitiveness. The regulator maintains a register with investment companies that are authorized to operate in Spain.

Are these brokers legit? 

WiseFunds is a broker that offers Crypto, CFDs and Forex trading. The broker doesn’t disclose the company behind the brand’s name as well as its regulatory information. The terms and conditions on the website state that WiseFunds is under the jurisdiction of Bulgarian and UK Governing laws. There is also no information about the broker’s location or contact details. The map in the “Contact us” section shows London as a location, so we assume that’s where the company’s office is supposed to be. However, WiseFunds is NOT listed as a regulated entity in any of the regulatory registers. 

Just Perfect Markets offers Forex, commodities, indexes, CFDs and leveraged financial instruments. It is owned and operated by Just Perfect Markets Limited and incorporated in St. Vincent & the Grenadines as a Business Company. St. Vincent and the Grenadines is notorious for its practically absent requirements and regulations. Due to the setup cost is low and it does not regulate forex trading. Therefore, it became an offshore zone for shady forex brokers such as 4xincome, Monfex and more. You can read our detailed article about the risk of trading with brokers from St. Vincent and the Grenadines.

Generally, we always advise traders to avoid dealing with unregulated offshore forex brokers, as they may be involved in investment scams. There are a number of properly Regulated Brokers to choose from on our website.

You can share your WiseFunds and Just Perfect Markets experience with us by commenting on this post.  

ASIC Flags Unauthorized Forex Firm GFCinvestment

The Australian Securities and Investments Commission (ASIC) has updated its blacklist to include GFCinvestment, which is also known as DARTALON LTD. The financial regulator was alerted to the firm after it made unsolicited calls or sent emails about investing, financial advice, credit or loans.

The Australian Securities and Investments Commission (ASIC) is an independent Australian government body that acts as Australia’s corporate regulator. ASIC’s role is to enforce and regulate company and financial services laws to protect Australian consumers, investors and creditors.

According to the website, GFCinvestment is a worldwide brand committed to your trading experience. The broker GFCinvestment offers a choice of various financial assets such as currencies, stocks, indices, commodities. The website is owned and operated by DARTALON LTD., St.Vincent & the Grenadines offshore company. 

The Australian regulator has warned that the broker does not hold a current Australian Financial Services (AFS) license or an Australian Credit license from ASIC to provide financial services in Australia, highlighting that the company could be involved in a scam.

The broker doesn’t seem to be regulated by any authority and the offshore location of one of the co-companies doesn’t make it look more reliable. It has also been blacklisted by UK’s regulator Financial Conduct Authority. 

In addition, the broker has got hundreds of negative reviews, where people complain about issues with withdrawing their funds and cold-calling from the side of the company.

To sum up, it is better to stay away from GFCinvestment, a broker that has a warning and also a quite big number of the negative review from the traders who was scammed by this firm. We recommend selecting among brokers licensed by the respective authorities in the UK, or Australia for example. For instance, a broker registered with the UK’s FCA can’t simply take investor’s money and disappear. They follow multiple reporting procedures and have to keep client funds segregated from the company’s. You can read our review on this broker here

The Central Bank of Ireland warns against Capital Hall


The Central Bank of Ireland (CBI), which also serves as a financial services supervisor, issued a warning against Capital Hall. According to CBI’s official notice, this forex and CFD broker has been offering financial services and/or investment advice to the Irish investors without being authorised.
The Central Bank of Ireland (Irish: Banc Ceannais na hÉireann) is Ireland’s central bank, and as such part of the European System of Central Banks (ESCB). It is Ireland’s financial services regulator for most categories of financial firms. The Central Bank of Ireland serves the public interest by safeguarding monetary and financial stability and by working to ensure that the financial system operates in the best interests of consumers and the wider economy.
The CBI also keeps a register of regulated companies and anyone can check whether a certain forex broker is licensed in the country or not. Besides, the CBI regularly publishes official warnings of unregulated companies that target local investors.


Capital Hall has specialized in financial investment solutions since 2016, and at the moment our area of expertise includes contracts for difference (CFDs), indices, currency and cryptocurrency pairs, precious metals, energy assets and securities. The company is owned by Capital Tech Ltd registration number 92819, Marshall Islands and operated by Pbox Ltd, registration number 204767374, Bulgaria. Despite the provided information about the Bulgarian registration, the broker is not registered or authorized by the Bulgarian Financial Supervision Commission. Obviously, both companies are not authorized and do not hold licenses to provide financial services.
We also keep on reminding that offshore-based brokers should be avoided, as those brokers registered offshore are not considered as reliable ones, because they are basically are not overseen by any authority.
It is better to choose among brokers licensed by the respective authorities in the UK, or Australia for example. For instance, a broker registered with the UK’s FCA can’t simply take investor’s money and disappear. They follow multiple reporting procedures and have to keep client funds segregated from the company’s. You can read our review on this broker here.

Forex Trading: Why Trade with UK FCA Regulated Brokers

FCA Regulator

Formed: 1 April 2013
Jurisdiction: United Kingdom
Headquarters: 25 North Colonnade London
Website: www.fca.org.uk

FCA Regulated activities

  • corporate governance
  • financial services
  • securities and derivatives (category including Forex & CFD trading)
  • insurance
  • consumer protection
  • financial literacy

Introduction to FCA

The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom that operates independently from the UK Government, is a conduct regulator for over 58,000 financial service firms, markets in the UK, as well the Prudential Regulation Authorization.

The FCA took responsibility for financial stability by bringing together a new regulatory structure and enhance its predecessor the Financial Services Authority (FSA) responsibilities, the agency that regulated financial service between 2001 and 2013. The authority received significant power to cover responsibility for regulation of the financial sector and firms, including CFD and Forex brokers, providing services to traders and investors. The objective of FCA is a maintenance of the financial market integrity in the United Kingdom and secure an appropriate degree of trader’s protection.

FCA, as an independent public authority, regulate the conduct by both retail and wholesale financial services firms with a purpose defined by the Financial Service and Market Act 2000 (FSMA). FCA aims to make financial markets work well so that traders and investors get a fair deal, through its enhanced market integrity and promote competition.

FCA website

In this FCA review to get things more clear we cover the following highlights:

Why trade with an FCA regulated broker?

In fact, any firm in the UK whether a business, asset manager, broker or financial investment firm the activity is mandated to be registered and regulated by the FCA. First of all, the FCA set a range of registration requirements before the broker is allowed to operate in the market, which includes raising of fees with a high initial capital to apply for the FCA license and carry out its regulated activities further. The license type based on factors such as a scale of activities and divided to STP license (check on STP Forex Brokers), which imposes EUR 125,000 initial capital and EUR 730,000 for Market Making license. In addition, upon application, the company will be checked for its adequacy to operate in the market, with a review of business plans, its budgets, resources, applied systems, and controls.  The directors and key staff will be interviewed and obliged to have the necessary qualifications with an effective background, so the requirements are met and the director experienced enough to run the brokerage.

In addition, the broker should maintain a physical office in the UK and organized to comply with the FCA rules and mandates at all times. FCA Brokers operate their business based on the FCA handbook guidelines to ensure clients are being treated fairly, the information provided accurately and most important, transparently.

The protective measures that are important to the trader, in particular, issues brokers in demand to segregate the client’s funds from the broker’s operational fund. That means broker stores their operation fund at separated from the client bank account, thus cannot use clients money for any purpose or even touch it. Furthermore, FCA brokers provide negative balance protection to their traders, so clients cannot lose more than its initial deposited capital. Lastly, the maximum of protection level achieved by solve of an unlikely event when a broker goes bankrupt or fall under insolvency issues, the client and his funds are protected, by the Financial Services Compensation Scheme (FSCS) so the client receives funds back with an upper limit of GBP 50,000 per client.

FSCS compensation

The regular supervision tasks of FCA ensures follow of strictest demands, while every authorized entity report, confirm and maintain on a daily and monthly basis, respectively, otherwise, the authority will get involved and will check the performance in detail. In the event broker didn’t follow FCA handbook guidelines, it may cause further investigation of a case, with imposing of fines, while powers have already been seen loads of their announcements, heavy fines or even dismisses of the broker’s license. See below an example of some of the largest financial penalty in the history of £284,432,000 for forex failings. In addition, the FCA is able to ban financial product, firm or the particular asset manager, as well have the power to instruct firms to immediate action, modification or its revoke if necessary.

FCA fines Barclays

With all the strict regulatory guidelines, if a trader or investor still believes they are encountering unfair trading experience with the broker, they can file a complaint against the broker with the relative department. Firstly, the regulated brokers in place must have a procedure to resolve disputes and respond within a set time, however, you can always go further and submit a complaint to the Financial Ombudsman Service, known as claim handlers. In addition, read our step by step guideline how to a complaint an FCA regulated forex or CFD broker.

Submit the complaint about UK broker: https://help.financial-ombudsman.org.uk/help

UK Financial Ombudsman Service

The benefits of trading with the FCA regulated Forex Brokers are at a glance, as the authority ensures strongly the broker’s responds, monitoring products, and other issues along with the compensation when necessary. Overall, the FCA made it in a scrupulous way by the sharp check on the firm, that the brokerage is computable to the successful prospective of operation, further market development and of course fair treatment of the traders. Therefore, FCA gained its highest consumers’ rankings, as the traders getting appropriate trading needs among market offering, unparalleled advice and knowledgeable behavior towards any occurred questions.

Moreover, the education and permanent support at FCA allows to find out about customer rights and financial advice, offers to complain, report a scam or unauthorized firm. And provides a guideline on how to avoid scams, with the comprehensive Avoid listing up-to-date.

FCA consumer organizations service: https://www.fca.org.uk/consumers

FCA Consumer Support

List of FCA Regulated Forex Brokers

The trader should carefully search for information about FCA forex broker license directly through an official site, which will appear on the Financial Services Register.

Moreover, the regulated broker website at most cases shows its FCA register number, yet confirm its statement at official source as well, due to numerous clone and fraud firms that use register number to pretend official.

FCA Brokers register

In addition, always check FCA Brokers Reviews, in the instance the full list of the UK regulated brokers’ list at our website currently includes over 80 FCA Regulated Brokers, and growing, while the total number of licensed ASIC Regulated Forex Brokers exceeds 340.

Conclusion on FCA regulation

The UK as one of the most respected and known financial centers that deliver strong economic figures throughout history, as well as stable political positions and influence on international markets, keeps the excellent level of a regulatory system.

In fact, FCA is one of the most respected trading industry authorities that establish the highest protective tools and keeps market integrity through its strong influence and monitor of the situation. The FCA enhanced their responsibilities to the financial and traders sectors by transparent ways the agency determines policies and carries its supervision functions. Also, as the main message of FCA is to only cooperate with authorized firms, the authority supports vast of data on how to make the best practice and avoid frauds. Read more about how Forex Trading Scam work at our article by the link.

Overall, some of the most reputable brokerages and regulated firms indeed regulated by FCA, while the status of FCA regulated Forex Broker the trader or investor can trade assured of a fair and effective deal and an accurate follow of obligations towards the clients’ protection with the legit regime itself.

Forex Trading: Why Trade with Australian ASIC Brokers

Formed: 1 July 1998

Jurisdiction: Commonwealth of Australia

Headquarters: Sydney, New South Wales

Website: www.asic.gov.au

ASIC Regulated activities:

  • corporate governance
  • financial services
  • securities and derivatives (category including Forex & CFD trading)
  • insurance
  • consumer protection
  • financial literacy

ASIC Regulator Introduction:

The Australian Securities and Investments Commission (ASIC) is Australia’s integrated markets, financial services, corporate and retail client regulator that was established back in 1998. The ASIC’s as a non-governmental organization duty and role cover regulation or administrate of leveraged foreign exchange transactions and financial service markets. The provision enables investors and traders to participate through fair, strong and efficient financial trading opportunities offered by the independent organizations. The ASIC exercises daily supervision of the retail foreign exchange market and focuses on misconduct within the financial markets while maintaining trust, improving performance and establish integrity.

ASIC website

In this ASIC review, we cover following highlights:

Why trade with an ASIC regulated broker?

The whole concept of the ASIC concern about trader protection, smooth market operation and regulation of unconscionable conduct that affects all financial products or services.

As a market and trader credit regulator, ASIC supervises and licenses companies that participate in Forex and CFD trading by the Australian license AFSL (Australian Financial Services License). In order to become an ASIC licensed forex broker, the firm should prove and confirm the uncompromised professionalism that covers various aspects and urges brokers to be an orderly and transparent organization.

The ASIC application process is accurate to the detail, accepts applications only from physical Australian entities with a sharp business plan, precise detail about trading operating model and details of liquidity providers. As well includes interviewing of responsible manager with appropriate skill and experience, while in fact, the broker’s manager can be dismissed due to the lack of necessary proficiency or any issues appeared in the history. The broker should also establish a high operation fund of at least $1 million, implement client safety measures with strictest fund management and fully segregate clients funds at all times with top-tier banks.

In case the broker managed to obtain ASIC license, the trader can be ensured the financial broker act transparently, by the operation through an ASIC’s guideline. The ASIC regulation to brokers trading service and operation are monitored on a daily basis, as the broker submit reports about every transaction or service provided, which ensures the integrity between the market offerings and unparalleled protection.

Besides the monitor of brokers’ procedures, ASIC effectively assesses how the financial service firm complying with its legal obligation, as well as investigated law breaches. That may cause ASIC to take further actions like infringement notices, issue of fines, official claims, a ban on credit activities or even company dismiss.

A recent example of ASIC active role and launches towards the unscrupulous brokers shows a cancel of a license of Melbourne based forex and CFD broker, as the broker failed to comply with a number of requirements. (Please check the News by the link).

ASIC cancels license

Moreover, it is not the only issue that the fines or cases were imposed on the company itself, the managing director is banned too. Since the director was involved in the contravention of a financial services law or is not adequately competent, the ASIC regulator respectively taking necessary actions.

Apart from the main role of the forex broker regulation and supervision, ASIC promotes confidence to all market players by public education and open sources that allow investors to obtain accurate information. For that reason, ASIC operates financial advice and strategy website www.moneysmart.gov.au that provide guidance on the investment issues. The service includes advisory on financial knowledge and management, various trading or investment opportunities, exchange risks, fundamental consultation, how to skip scams and more.

ASIC education

In addition, the ASIC authority constantly improves legislation as studies behavior of the market, monitors decision marking of consumers along to recognition of new trends. For the protection of trader’s rights, ASIC refers to prevent market manipulation, fraud or unfair service delivery, so the trader can submit a complaint against the ASIC registered company, complaint ASIC or even can get compensation through appropriate channels.

Submit your complaint to ASIC, consult broker’s name and nature: www.fos.org.au

Overall, ASIC has established a sharp procedure at every situation the financial brokerage firm or retail trader might go through, which also includes the clients’ compensation by the Australian Restructuring Insolvency & Turnaround Association if the broker falls under insolvency.

List of ASIC Regulated Forex Brokers

Any trader can search information about ASICs forex broker license directly through an official site, or to check the regulated broker website, as most websites show on the footer or regulation page its Australian Business Number (ABN) and Australian Financial Services License (AFSL).

ASIC connect website

Also, you can check on ASIC Brokers Reviews, as currently the Australian regulated brokers’ list at our website includes 40 ASIC Regulated Brokers, and growing, while the total number of licensed ASIC Regulated Forex Brokers exceeds 480.

Conclusion on ASIC regulation

Australia became one of the financial hubs that attract vast Forex brokers to set up their overseas operation and apply for the AFSL license. In fact, ASIC Brokers are now among the most demanded and reputable (such as XM broker), while the advanced regulatory guidelines ensure the business of trading regulation adheres to strictest follow of rules. In addition, recent updates from ESMA MiFID II order that reduces the leverage up to a maximum 1:30 attracts even more and more traders to open an account with forex brokers from Australia, as the high leverage levels alike 1:300 or 1:400 are still allowed for ASIC Brokers. Insurance of fair, orderly and transparency is a goal that was achieved by the ASIC authority which monitors not only the trading environment provided, the clients’ funds management, but also carefully check on the broker’s responsible management while some of the directors might be banned to run forex brokers. Therefore the potential traders and investors can choose among the ASIC Regulated brokers with a clear statement the firm acts according to the strictest supervision tools, as ASIC took all necessary step to ensure the best possible provision of the trading and financial investment services.

Cyprus Securities and Exchange Commission (CySEC)

Formed: 2001

Jurisdiction: Republic of Cyprus

Headquarters: Nicosia, Cyprus

Website: www.cysec.gov.cy

The CySEC is responsible for the supervision of the following entities:

  • Cyprus Investment Firms (CIFs)
  • Cyprus branches of Investment Firms (Ifs) of other EU member-states
  • Tied Agents of CIFs
  • Undertakings for Collective Investment in Transferable Securities (UCITS)
  • UCITS (Undertakings for Collective Investment in Transferable Securities)  Management Companies
  • UCITS Agents
  • Cyprus branches of UCITS Management Companies of other EU member-states
  • Administrative Services Companies – Trustee and Fiduciary Service Providers
  • Variable Capital Investment Companies
  • Alternative Investment Fund Managers (AIFMs)
  • Regulated Markets
  • Central Counterparty Clearing House (CCPs) of over-the-counter (OTC) derivatives
  • Trade depositories of over-the-counter (OTC) derivatives

Introduction:

Cyprus Securities and Exchange Commission or CySEC was launched in 2001 as an interdependent public corporate body to regulate leveraged foreign exchange transactions and investment services market in the Republic of Cyprus. As of 2004 Cyprus participate in the European Union, therefore CySEC became a respected part of European MiFID regulation.

Besides the fact that Cyprus has an ideal location, it is also a tax haven with its lower tax rates, as well significant background in the financial business. In addition, the MiFID harmonization law allows Cyprus registered investment firms and brokerages to access all European markets.

In particular, establishing of the Cyprus securities market as one of the safest and attractive investment destinations a significant number of Forex Brokers, as well as vast of Binary Options firms obtained CySEC license and establish their operational offices in Cyprus.

Actually, Cyprus is a known hub of Binary Brokers, as many firms found their benefits by the CySEC authorization since most other European jurisdictions and regulators strictly prohibit binary trading. However, the significant move happened by 2012 once the board made an announcement regarding binary options classification and categorize them as a financial instrument. All binary options providers were obliged to restructure offering and clearly state to every customer the highest risk in binary trading as well to operate in a fair way towards the traders. Yet, Cyprus still remains as first and one of the leading trading centers that proclaimed binary options as an investment instrument and gives access to the Eurozone.

Considering the essential growth of the industry, CySEC role becoming even more valuable, as authority ensures investor protection and healthy development of the trading offer through its effective supervision of the securities market.

Why trade with a CySEC regulated broker?

Given the fact that Forex market is an OTC market, which has no specific regulations or jurisdiction, it is necessary to understand who is a trustful broker and who is not, to protect investors, as well to control the market in order to function smoothly. And that is a purpose why responsible Regulators were established by various jurisdictions.

In turn, the responsibilities of CySEC include issuance of licenses to brokers operating in the foreign exchange and stock markets, their subsequent control and audit to ensure compliance with the laws, detection of violations with further imposes of penalties, disciplinary actions or case processing through the state bodies.

The grant of license and before any forex company becomes an official CIF (Cyprus Investment Firm) a broker should comply with the set of standards that diverts to the company history and its business model of operation. The CySEC will examine the application while the broker should have a physical office in Cyprus, operate at least for 3 years, to have the specified type of activities and financial service, as well properly enable customer protective tools through a fund segregation, join to schemes and more. The broker should also establish a high operation fund subject and depending on the content of an application, thus the STP applicant capital requirement is at least €200,000, while the Market Maker brokerage model has to confirm its capital adequacy ratio of at least €1 million.

Once the broker is official CySEC Regulated Broker the firm then can operate in the stock, forex and CFD markets and what is important mandatory follows all the guidelines set by MiFID (the Markets in Financial Instrument Directive). Besides that, the CySEC continues to work closely with every regulated broker and inspects operation on a daily basis.

In recent years, CySEC became a very active authority in terms of inspection of Forex Brokers and suspicious activities, as there were issues and cases in operational history with some of Cyprus regulated brokers. The latest announces were issued for non-compliance with the applicable laws, e.g. include suspend and withdrawal of AnyOption broker and Fenix Capital Markets Trading licenses, or impose for fine of total €130.000 the InstaForex and ForexMart. Therefore, CySEC has been changing its position so now acting more sharp towards the brokers which service does not meet reporting requirements and breach obligatory policy. The imposing of sanctions for violations include announcements of the CIF license withdraws, slapping fines and more frequent check-ups to make sure compliance with new measures.

In the scenario and unlikely event that a CySEC regulated Broker goes insolvent, the clients are covered by the Investor Compensation Fund for IF Clients (“ICF”). The purpose of the ICF is to secure the claims of covered clients against the ICF members through the payment of compensation if the necessary preconditions are fulfilled with the maximum amount of compensation up to €20,000 per client.

Apart from the main role to regulate and supervise forex brokers, CySEC accurately reviews and amends the new products offering, such as current trends around Cryptocurrencies, Binary Trading, etc. The Cyprus authority when necessary updates investment advice, undertaking training to prevent frauds and financial abuse, including checking issues of money laundering and other threats, as well as educate publicity by regular courses and publications.

Even though the Cyprus Securities and Exchange Commission does not have restitution powers and therefore does not investigate individual complaints.  If you have a complaint, it is best to first ask the CIF involved to put things right, while CIF’s are required to respond in writing within five days. The traders also recommended to check the issue with the office of the Financial Ombudsman, if not satisfied with the firm’s response, they rejected your complaint or you do not have the answer. The Financial Ombudsman is an independent service for settling disputes between CIF’s and their clients.

How to submit a complaint: www.cysec.gov.cy/en-GB/complaints/how-to-complain/

The Financial Ombudsman website: www.financialombudsman.gov.cy

What is also precisely, the complaints received from clients about unscrupulous brokers or fraud companies will be resolved by the Commissions as soon as possible. At the same time, the CySEC publishes its official listing of warnings, list of non approved domains that help to prevent scams, while the information about unprincipled brokers is open and transferred to other financial regulators.

List of Regulated Forex Brokers

In order to help traders to verify information about CySEC forex broker license, the official website publishes a list of regulated entities. The CySEC broker’s website also displays on the footer or regulation page its CySEC license number, which consists of 5 digits in the format 111/11. Here you can see TriumphFX CySEC authorized broker

As well, you can always check on CySEC Broker Reviews with updates and news from the broker. Currently, Cyprus regulated brokers’ list at our website includes 50 CySEC Regulated Brokers and growing. While in total there are more than 200 investment firms regulated by the Cyprus Securities and Exchange Commission. 

Conclusion:

Of course, CySEC has many potentials to become at the level of a reputable authority like UK’s FCA and implement more strict requirement to set up financial investment or trading company. Yet, Cyprus itself continues its growth and remains a popular Forex Broker destination. In fact, there are much more regulated forex broker in Cyprus rather than any other European or even world jurisdictions.

Since the majority of Europe’s Forex brokers regulated by the CySEC, the imposed authority along with the MiFID guidelines and European control establish a strong impact on the industry and of course traders’ protection. The transparent and fair manner of operation acts towards traders as the contractual obligations fulfilled by the regular reporting, along with the constant eye on broker’s operation, as the financial company may impose a risk to have sanctions and penalties, which are actually not that rare among CySEC brokers.

CySEC has suspended the license of MPS Marketplace Securities

Regulator CySEC

The Cyprus Securities and Exchange Commission (Check out CySEC regulated brokers) has announced the suspension of the authorization of the Cyprus Investment Firm MPS Marketplace Securities Ltd in whole. The company has previously been known as SpotOption Exchange Ltd and S.O. Spotoption Ltd.

According to the official notice, the above decision was reached as the aforementioned alleged violation may cause concern and risk relating to the protection of the company’s clients and constitute a threat to the orderly operation and integrity of the market.

MPS Marketplace Securities was given 15 days to take actions in order to comply with the aforementioned provisions. 

During this suspension period the company is not permitted to provide/carry out investment services/activities as well as enter into any business transaction with any person and accept any new client. It is also not allowed to advertise itself as a provider of investment services.

Also, the company, provided this is consistent with the wishes of its existing clients, may proceed with the following actions: complete all its own transactions and those of its clients which are before it, in accordance with client instructions and return all funds and financial instruments which are attributable to its clients.

FMA of Austria warned against Prestige Financial Markets and FX Crypto Club

The Austrian Financial Market Authority (FMA) warns the public against the activities of two forex brokers Prestige Financial Markets and FX Crypto Club. These companies have been offering investments without complying with Austrian financial legislation. According to the official statements, these brokers are not entitled to carry out banking transactions in Austria that require a licence.

The Austrian Financial Market Authority (FMA) is an independent, autonomous and integrated authority for the Austrian financial market. The Austrian FMA is responsible for: contributing to the stability of Austria as a financial market; reinforcing confidence in the ability of the Austrian financial market to function; protecting investors, creditors and consumers.

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Are these brokers legit?

FX Crypto Club is owned and operated by CapCorp Ltd, incorporated in the Marshall Islands. The Marshall Islands is notorious for its practically absent requirements and regulations. Due to the setup cost is low and it does not regulate forex trading. Therefore, it became an offshore zone for shady forex brokers such as GoldmanCFD, Obsbit and more. 

Prestige Financial Markets claims to be a leading and regulated broker in the trading industry. However, we have some doubts about its regulation. The company is owned by AllProTech OÜ. AllProTech OÜ operates some other brokers that we have previously reviewed (AlphaCapital, 10Brokers and Prestige.FM) and has been blacklisted by several regulators in Europe. Obviously, all the brokers associated with the AllProTech OÜ should be avoided. 

We advise all investors and traders to avoid unregulated offshore brokers. Traders should trade with well-regulated brokers such as UK brokers or brokers in Australia and reliable brokers such as eToro and FXTM.

You can share your trading experience with Prestige Financial Markets and FX Crypto Club by commenting on this post.

FCA has issued a warning about trading company HQBroker

The British financial regulator FCA has issued a warning about trading company HQBroker.

This broker is not regulated, yet it has been providing financial services to UK residents.

According to the HQBroker’s website (https://www.hqbroker.com), the company is registered in Hong Kong. However, if you check company’s terms and conditions, it says that HQBroker is operated by Capzone Invest Ltd., registered on the Marshall Islands. The website itself doesn’t have any information about company’s regulation. Usually the companies that operate in the offshore areas (such as Marshall Islands) are not licensed nor regulated and considered to be frauds. It is dangerous and risky to deal with them.

HQBroker provides trading in forex currencies, metals, stocks, equity shares and CFDs. Also the company operates on the MetaTrader 4 trading platform, which is very popular among Forex brokers.

There are plenty of negative reviews can be found on the net about HQBroker. Starting from harassing phone calls and rude representatives that keep on trying to get people invest and finishing with failed attempts of the investors to withdraw their money back.

It is recommended to trade with authorised and regulated brokers. There are many trading companies that offer relatively good trading deals and conditions. These companies are regulated by such financial regulator like the ASIC, CySEC and FCA.