The Cyprus Securities and Exchange Commission (CySEC) announced it has partially suspended the license of XTrade Europe Ltd. – the parent company of the forex and CFD broker XTrade.
The decision was taken on May 29, 2017 and forbids the broker to provide “financial services and perform financial activities to new clients”. CySEC clarifies that this means that while the suspension is active, XTrade cannot sign up new clients and cannot receive, transmit or execute any orders from new clients.
The suspension is prompted by the alleged violations of several paragraphs of the Cyprus Investment Services and Activities and Regulated Markets Law of 2007.
According to CySEC, the marketing material disseminated by the company and/or its associates (affiliates/Introducing Brokers/Business Introducers – ‘associates’) does not seem to be fair, clear and not misleading. Additionally, XTrade allegedly “does not seem to have in place adequate policies and procedures sufficient to ensure its compliance with the above – considering its inability to control and monitor the marketing material that the Company and/or its associates disseminate.”
The regulator finds that those alleged violations endanger the clients’ best interests and the smooth operation of the capital markets. CySEC gives XTrade one month to comply with the requirements.
This is not the first time the broker has a run-in with the Cyprus regulator. Last October it fined the company a total of €225 000 for a number of offenses, including misleading marketing materials and bonus conditions and failing to provide sufficient information about the risks of trading.
It has also been in trouble with the ASIC over suspicions of improper handling of client money and with the British Columbia Securities Commission (BCSC) for accepting as clients British Columbia residents, without having the proper license to do so.
Xtrade offers trading in forex, commodities, indices, shares and CFDs on its proprietary platform Xtrader Pro. Its European head office is in Cyprus, but the contact numbers are from the UK. It is active in some of the EU countries, the Middle East and Southeast Asia. The broker also has a South African license.