IGM Forex Ltd. has received a Cyprus Investment Firm (CIF) license to act as a provider of investment and ancillary services, the Cyprus Securities and Exchange Commission (CySEC) said on Tuesday.
The license was issued on 16 August, 2016. It is currently non activated, which disables the entity to provide the services for which it was licensed until further notice. Under the local regulatory framework, CIF licenses are issued non active, but are later activated after the licensee meets a number of additional regulatory requirements.
IGM Forex was registered in Cyprus in the second half of 2015. No information for the company was immediately available.
In Cyprus, financial service providers cannot do business without having an authorization. They need to hold a license from the relevant authorities in the country or in any other EU member.
The CySEC provides two types of CIF licenses – limited, under which the financial company can execute orders on behalf of clients, but not on its own account, and full license, which allows an entity to act on both its own behalf and that of clients.
CySEC regulation is preferred by many forex brokers. CIF license holders gain access to all countries in the European Economic Area (EEA). In addition, Cyprus is known as an area with strict yet also less restrictive regulation, compared to other reputatative forex legislations. Earlier this week, the regulator announced the addition of two new CIFs – forex brokers Wonderinterest Trading Ltd. and Fenix Capital Markets Trading Ltd.
Although the number of newly-licensed CIFs is stable, in the past months many entities have parted with their licensees, either at their own discretion or forced by the regulator. The CySEC has been tightening its supervision, continuously suspending brokers’ licenses for noncompliance with its requirements. Some of these suspensions have turned into license withdrawals or renouncements.
The CySEC licenses, supervises, and regulates players on the local capital market. Its managing board consists of five members, each one of which serves a term of five years.