Category: Regulation

The Cyprus Securities and Exchange Commission announces that the authorisation of the Cyprus Investment Firm Stocks Forex Ltd, number 283/15, is suspended in whole. Stocks Forex Ltd operates the brands Forex4Group and Stocks Forex AF. The main reason for the license withdrawal was the non-compliance with some sections of the Regulated Markets Law.

According to the latest available information, the company's own funds and initial capital were below the minimum allowed. Also, Stocks Forex Ltd has failed to submit its capital adequacy forms, and has not disclosed its exposures. 

The above decision was reached as the aforementioned alleged violation causes concern and risk relating to the protection of the company’s clients or of the investors and constitutes a threat to the orderly operation and integrity of the market.

The company was obliged to take actions in order to comply with the aforementioned provisions within the period of one month. 

For as long as the suspension of the authorisation is in force, Stocks Forex Ltd 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 and 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 completing all its own transactions and those of its clients which are before it, in accordance with client instructions. It also obliged, if needed, to return all funds and financial instruments which are attributable to its clients.

You may check our list of the CySEC-Regulated Brokers.

The Austrian Financial Market Authority (FMA) warns the public against the activities of two forex brokers Morgan Trust and ICTrades. These companies have been offering investments without complying with Austrian financial legislation. According to the official statements, Morgan Trust and ICTrades 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.

Are these brokers legit?

ICTrades is an online Forex broker. It is a trading name of Pro Star Griffith Corporate, registered in Saint Vincent and the Grenadines. Besides its offshore location, which is already a red flag, Pro Star Griffith Corporate itself has a quite bad reputation. We have reviewed some brokers operated by Pro Star Griffith Corporate (including Traderia, Finroyalty and GoldenCFD) and we do not recommend dealing with either of them. 

The same issue is with the Forex broker Morgan Trust. The company is owned and operated by GreenRiver OU, with a registered address in Tallinn, Estonia. GreenRiver OU operates some other brokers that we have previously reviewed (GCC Investing, Jones Mutual and InvestTeck) and has been blacklisted by several regulators in Europe. Obviously, all the brokers associated with the GreenRiver OU should be avoided. 

It is important to also check the companies behind the brand's/broker's name, as well as all the legal and contact details. When engaging with brokers that do not operate on the grounds of a valid license, issued from a trustworthy authority, traders are putting their investments at higher risk. 

Traders should trade with well-regulated brokers such as UK brokers or brokers in Australia and reliable brokers such as AvaTrade and FXTM.

You can also share your trading experience with Morgan Trust and ICTrades by commenting on this post.

The Cyprus Securities and Exchange Commission has announced that the authorisation of the Cyprus Investment Firm Daweda Exchange Limited, number 289/16, is suspended in whole.

This decision was made due to the suspicions of an alleged violation of the company’s possible non-compliance at all times with the authorisation condition regarding the appropriateness of its shareholders.

The above decision was reached as the aforementioned alleged violation causes concern and risk relating to the protection of the company’s clients or of the investors and constitutes a threat to the orderly operation and integrity of the market.

Daweda Exchange Limited was given 21 day to take actions in order to comply with the aforementioned provisions. 

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

Also, the company, provided this is consistent with the wishes of its existing clients, may proceed with completing all its own transactions and those of its clients which are before it, in accordance with client instructions. It also obliged, if needed, to return all funds and financial instruments which are attributable to its clients.

You may check our list of the CySEC-Regulated Brokers.

Among the latest issued warnings of the UK’s Financial Conduct Authority (FCA) is the one against an unregulated financial services provider - company NovaTrades that appear to target UK and European residents (as its website gives the option to choose between English, Italian, Spanish, German and Portuguese). The particular attention was paid to this company as it’s not authorized by the FCA and is also carrying on regulated activities which require authorisation. According to company’s website (https://www.novatrades.com/), Novatrades is registered in the Marshall Islands, which means it’s an offshore company. Forex brokers incorporated there are not licensed, nor monitored by any authority. This broker offers options for trading in some of the liquid assets, also currency pairs, stocks, most major financial indices, and commodities. NovaTrades operates via the popular MetaTrader4 trading platform. There are numerous negative reviews about NovaTrades found on different websites and forums. Those who invested with this company state that it’s not possible to withdraw the money from their accounts and that declared on the website terms and conditions are not followed by the management. Seems like NovaTrades might be one of those fraud companies. The FCA is known for its strict rules and severe supervision. It keeps the track of the authorized and licensed forex and binary companies where the potential investors can check if the chosen broker is licensed before engaging with it. This agency also issues alerts against the companies that can possibly harm the investors.

The Securities and Futures Commission (SFC) of Hong Kong has reported about the fining of CN Capital Management Limited $1.2 million for not being able to maintain the efficient compliance function along with the internal controls of employee account dealing.

CN Capital Management Ltd. is a company that specializes in capital operation and management.

Also the representatives and responsible officers of the CN Capital George Chan Yee Lee and Stephen Ng Wing Leung were reprehended and fined $100.000 each for not keeping up with the requirements for employee account dealing under the Fund Manager Code of Conduct. This Code sets out the management requirements for the SFC registered or licensed representatives who work with or manage the collective investment businesses. The mentioned responsible officers violated the main principle, that those who are engaged in investment management business must give the priority to their clients and avoid conflicts of interests when making the financial operations.

According to the conducted and revealed SFC's investigation none of the CN Capital employees has revealed their personal investment funds to the company in a written form. Also around 3188 personal trades were conducted by Mr. Chan and Mr. Ng without any written approval from the CN Capital designated officer.

The SFC took into consideration the following facts, when deciding the fines and penalties: both responsible officers of CN Capital the regulatory violations, they helped SFC to resolve this issue and the personal trades of Mr. Chan and Mr. Ng didn't influence any client. They also have no disciplinary issues with the SFC.

The Australian Securities & Investment Commission (ASIC) has temporarily suspended the license of the forex broker Direct FX Trading Pty Ltd. due to company's failure to maintain some of its duties.

DirectFX is an Australian broker, which provides trading in a variety of assets and operates on MT4 and CQG platforms. The company was established in 2006 and considered to be one of the biggest forex trading companies in Australia.

According to the ASIC, the broker will not be able to perform trading activities because of the license suspension. The suspension will last from ten weeks and up to six months. This period directly depend on whether the company shows the ability to comply with the requirements of the regulator.

ASIC has been reviewing Direct FX's compliance with its financial duties since October 2017 and it resulted to the suspension. One of the regulator's requirements was for the broker to provide an audit report by February 9, 2018, but the report was provided only in the beginning of April.

In the process of the investigation, ASIC has discovered that the broker company has also failed to maintain the Net Tangible Asset (NTA) requirements. One more reason for the suspension measure, is that the Direct FX hasn't replaced key persons mentioned on its license.

ASIC stated that Direct FX won't be allowed to provide any financial services until key arrangements are adequately addressed and the broker demonstrates the compliance with all the requirements attached to its license.

A few days ago UK financial regulator Financial Conduct Authority (FCA) has issued its another warning against an unregulated trading company that tries to reach out British investors and also EU residents as the websites gives you a choice among English, German, French and Spanish languages.

This warning concerns the company CFD Stocks (www.cfdstocks.com/).

The company CFD Stocks is not authorized by the FCA and also it carries on regulated activities that require authorization.

CFD Stocks is owned by Pacific Sunrise UK Ltd. CFD broker provides trading with currencies, commodities and other assets. It allegedly is based in Britain.But if you read their terms and conditions it turns out that the company is registered in Saint Vincent, which means it is one more offshore company with no license and fraudulent activity.

There are also a lot of negative reviews about this company, where investors state that they are not able to withdraw their money for months and that the company representatives are always asking for more.

It is very important to be aware and stay alert if you're dealing with financial trading services. The best options is to go for the licensed and authorised companies under the regulators (FCA, ASIC, CySec).