The Cypriot watchdog today announced publicly that Finteractive Ltd (trading as FXVC) has relinquished its authorisation, the Cyprus Investment Firm (CIF) license under which it was governed until ‘to this date.
CySEC has made it clear that Finteractive’s license waiver is entirely voluntary based on the company’s decision and not the result of any regulatory action. However, the regulator imposed a fine of €100,000 on this broker in May due to breaches of the company’s regulatory obligations.
The precise details of the regulations have not yet been made public, but the violations relate to general principles of conduct related to the Money Laundering and Terrorist Financing Act (L. 188(Ι)/2007).
In particular, FXVC has been flagged for conducting business or facilitating certain activities not mentioned in its authorization. Cypriot CIFs must notify CySEC when providing their services in third countries. Before they can deliver their product to a particular country, they must first obtain the appropriate clearance from the country’s regulatory authorities.
Although the regulator has not made it clear why Finteractive has decided to say goodbye to its CIF license, it has recently seen many regulated brokers choose to relinquish their license voluntarily, and not as a result of regulatory issues.
The reasons that led to this decision remain unclear, but CySEC will certainly maintain oversight of the financial services firm until it has taken over its responsibilities under the license.
A visit to the broker’s website reveals that Finteractive has already made changes to its website to remove any references regarding the licensing and supervision of the firm by CySEC. The company also stopped providing its services through its domain www.fxvc.com/eu.
Additionally, the company shared the following statement on its website:
“FXVC has decided to voluntarily relinquish its license (238/14) to operate as an investment firm. Accordingly, FXVC will no longer provide/perform investment services or enter into business transactions. In accordance with the above and in accordance with our T&C, all open transactions must be closed by 28/02/2022. If you do not close your open positions by the end of 02/28/2022, they will be automatically closed. Customers who have eligible funds in their account will be refunded in accordance with our T&Cs. For more information, contact our customer service at [email protected]”
Once confirmed by a separate decision to be announced later, Finteractive will no longer be authorized and regulated by CySEC and therefore will not be able to provide financial or ancillary services. The regulator will allow the broker three months from that date to fulfill its obligations arising from the investment services which will lapse, during which time it will remain under the supervision of the Cypriot watchdog.
Under the island country’s regulatory framework, the company must return all outstanding balances to its customers and deal with all their complaints. In addition, Finteractive must provide confirmation from its external auditor that it has no outstanding obligations and must include details of each of the company’s clients.