CySEC requires FX brokers to provide certain financial data following Brexit

CySEC requires FX brokers to provide certain financial data following Brexit

CySEC

In relation to UK`s referendum shocking outcome, which threw global markets in complete chaos, the Cyprus Securities and Exchange Commission (CySEC) has requested all licensed brokers to submit data about their own funds and capital adequacy ratio at close of business today.

The Cypriot watchdog has addressed all Cyprus Investment Firms (CIFs), which it oversees, to provide information on the effects that Brexit has on their activities, including any contingent liabilities. CySEC has probably undertaken this measure due to concerns over negative clients account balances, as such occurred in the aftermath of the Swiss Franc spike and some brokers, such as FXCM, are still recovering from the negative consequences.

Earlier in May the Cypriot financial regulatory body issued a notice towards CIFs warning them to monitor closely pre-Brexit situation and act accordingly in order to minimize possible risks to which they and their clients are exposed.

Cyprus proves to be one of the best forex jurisdictions, as local regulator seems to express real care over financial stability and closely monitors whether licensed FX brokers observe all requirements set, one of which is to maintain net tangible assets amounting to at least EUR 730 000, and another – to keep their own funds separated from client assets.

We remind you that under European Union law any forex broker licensed in either Member State, can operate in the UK and vice versa. This may change following the outcome of the UK referendum, however, according to Article 50 of the Lisbon Treaty, UK has a 2-year period to separate itself from the Union and until then it is technically still a EU member, so all existing regulation is applicable.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may also like

Stellar lumens now available on eToro’s platform

Due to the increased interest in altcoins among