The Cypriot watchdog today made a public notice that Finteractive Ltd (trading as FXVC) renounced its authorization, the Cyprus Investment Firm (CIF) License under which it has been governed until this date.
CySEC made it clear that the Finteractive’s surrender of license is entirely voluntary based on the company’s decision and does not arise as a result of any regulatory action. However, the regulator fined this broker in May €100,000 due to shortcomings in the company’s regulatory obligations.
Accurate details of the settlement haven’t yet been made public, however the violations are related to the general principals of conduct related to the Money Laundering and Terrorist Financing Law (L. 188(Ι)/2007).
In particular, FXVC 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.
Although the regulator didn’t clearly state why Finteractive has decided to say goodbye to its CIF authorization, it has recently seen many regulated brokers opt to voluntary surrender their license of their own accord, and not as a result of any regulatory issues.
The reasons leading up to this decision remain unclear, but CySEC will certainly maintain supervision over the financial service company until it has taken care of its responsibilities under the license.
A visit to the broker’s website reveals that Finteractive has already proceeded with changes in its website to remove any references regarding authorization and supervision of the company by CySEC. The company has also ceased the provision of its services through its domain www.fxvc.com/eu.
In addition, the company has shared the following statement on its website:
“FXVC has decided to voluntarily renounce its license (238/14) to operate as an investment firm. Therefore, FXVC will no longer provide/carry out investment services or enter into business transactions. As per the above and in accordance with our T&C, all open trades will need to be closed by the 28/02/2022. If you do not close your open positions by the end of 28/02/2022, they will be closed automatically. Clients who have eligible funds in their account will be refunded in accordance with our T&C. For further information contact our Customer Support at [email protected]”
Once confirmed by a separate decision to be announced later, Finteractive will be no longer licensed and regulated by CySEC and thus cannot provide financial or ancillary services. The regulator will give the broker three months from that date to settle its obligations arising from the investment services that will be lapsed, during which time it remains under the Cypriot watchdog’s supervision.
Under the island country’s regulatory framework, the company must return all outstanding balances to its clients and handle all of their complaints. In addition, Finteractive must provide a confirmation from its external auditor that it does not have any pending obligations and must include details of each of the company’s clients.