The Cyprus Securities and Exchange Commission (CySEC) has taken away the Investment Firm (CIF) License of FX retail brokerage firm Maxigrid Limited (trading as Dualix & AGM Markets).
According to the CySEC regulatory manifest, Maxigrid has had its CIF authorisation withdrawn as the company materially contravened its licensing conditions and no longer meets the conditions under which the approval was granted.
The Cypriot watchdog provided a breakdown and specific details for the regulatory action, explaining that its decision was taken based on violations of the investment laws.
In particular, Maxigrid was flagged for conducting business or facilitating some activities not stated in its authorisation. Cypriot CIFs need to notify CySEC when they are providing their services in third countries. Before they can deliver their product in a given country, they need to get appropriate authorisation from the country’s regulatory authorities first.
Maxigrid was among a handful of Cypriot brokers that the UK’s FCA suspended their passporting rights last year. At the time, the British watchdog also 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).
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.
Shortly after the FCA’s crackdown, Maxigrid voluntarily turned their backs to the UK market and decided to cease providing any investment services to Britons.
Meanwhile, the CySEC statement announcing the license withdrawal further reads that Maxigrid parent does not appear to comply with the authorisation conditions concerning “suitability of members of the management body or shareholders,” and other organisational requirements.
In addition, Maxigrid was probed by CySEC for lack of compliance with regulatory requirements that govern the assessment of suitability and appropriateness of clients, as well as its obligation to execute orders on the most favourable terms to their customers.
At the time, CySEC ordered the company to take corrective measures within a set framework; otherwise, additional measures will be taken, such as the imposition of new fines and/or even the withdrawal of their licenses.
