CySEC Withdraws ICF Membership from Four Brokers
The Cyprus
Securities and Exchange Commission (CySEC) has announced that the Investors
Compensation Fund (ICF) has withdrawn the membership of four Cyprus-based
investment firms: Stone Edge Capital Ltd, Holiway Investments Ltd, FXBFI Broker
Financial Invest Ltd and KAB Strategy Ltd.
According
to the announcement, the ICF revoked the membership of these firms following
CySEC’s decision to withdraw their Cyprus Investment Firm (CIF) authorizations.
However,
covered clients of the four firms will still be able to file compensation
claims for investment operations carried out before the membership
withdrawal, provided they meet the eligibility criteria outlined in CySEC’s directives.
The ICF was
established to compensate covered investors if the CIF cannot fulfill its
obligations. As per regulations, firms authorized as CIFs in Cyprus must be ICF
members. Consequently, when CySEC revokes a firm’s CIF license, the ICF will
cancel their membership as well.
Source: CySEC
When and How the Firms
Lost Their CIF Licenses
In the case of KAB
Strategy, the decision to withdraw its license was announced in the second half
of 2023, following the companies’ voluntary renunciation of it. On the other hand, FXBFI
Broker Financial Invest, also voluntary renounced it licence, but this occurred after a series of enforcement
actions against the company in the past.
The
regulator identified that the firm had not established sufficient AML/CFT policies,
controls, and procedures to effectively counter and manage risks related to
money laundering and terrorist financing. This action resulted in a €50,000 penalty
being levied on FXBFI, the operator of 101investing.
In the case
of Stone Edge Capital and Holiway Investments, the licenses cancellations were
dictated by an investigations conducted by CySEC, which revealed that the entities
had violated the terms of the CIF authorization.
CySEC
pointed out in May that Stone Edge Capital was not in compliance with
organizational standards and did not establish sufficient and suitable
systems to identify transactions associated with money laundering.
Additionally, it neglected to put in place systems and procedures for internal
reporting.
The Cyprus
Securities and Exchange Commission (CySEC) has announced that the Investors
Compensation Fund (ICF) has withdrawn the membership of four Cyprus-based
investment firms: Stone Edge Capital Ltd, Holiway Investments Ltd, FXBFI Broker
Financial Invest Ltd and KAB Strategy Ltd.
According
to the announcement, the ICF revoked the membership of these firms following
CySEC’s decision to withdraw their Cyprus Investment Firm (CIF) authorizations.
However,
covered clients of the four firms will still be able to file compensation
claims for investment operations carried out before the membership
withdrawal, provided they meet the eligibility criteria outlined in CySEC’s directives.
The ICF was
established to compensate covered investors if the CIF cannot fulfill its
obligations. As per regulations, firms authorized as CIFs in Cyprus must be ICF
members. Consequently, when CySEC revokes a firm’s CIF license, the ICF will
cancel their membership as well.
Source: CySEC
When and How the Firms
Lost Their CIF Licenses
In the case of KAB
Strategy, the decision to withdraw its license was announced in the second half
of 2023, following the companies’ voluntary renunciation of it. On the other hand, FXBFI
Broker Financial Invest, also voluntary renounced it licence, but this occurred after a series of enforcement
actions against the company in the past.
The
regulator identified that the firm had not established sufficient AML/CFT policies,
controls, and procedures to effectively counter and manage risks related to
money laundering and terrorist financing. This action resulted in a €50,000 penalty
being levied on FXBFI, the operator of 101investing.
In the case
of Stone Edge Capital and Holiway Investments, the licenses cancellations were
dictated by an investigations conducted by CySEC, which revealed that the entities
had violated the terms of the CIF authorization.
CySEC
pointed out in May that Stone Edge Capital was not in compliance with
organizational standards and did not establish sufficient and suitable
systems to identify transactions associated with money laundering.
Additionally, it neglected to put in place systems and procedures for internal
reporting.
