The Cyprus Securities and Exchange (CySEC) has announced the commencement of the compensation procedures for PFX Financial Professionals Ltd clients. The company also has several brands under operation including FXFINPRO Capital and Finproinvest. CySEC invites the company clients to leave a request and provide the nature of their claims on a special portal, as reported by Finance Magnates.
The CySEC revoked FXFINPRO’s CIF license and forced to cease its operations in October 2018. The license was revoked after Commission suspected the company and its management of non-compliance with regulatory requirements.
In particular, the forex broker was previously informed of a violation of Articles 28 (1) and 36 (1) of the Law related to obligations in the provision of investment services to clients. In addition, FXFINPRO did not properly provide financial statements in violation of Article 114 and also violated the provisions of Article 139 (1), which requires regulated firms to provide reliable, complete and accurate information to CySEC.
Fortunately for traders, FXFINPRO holds membership status in the Investor Compensation Fund (ICF), which serves to compensate and protect the interests of clients in case the member is unable to fulfill its financial obligations.
According to the CySEC statement, the regulator will initiate the compensation payment procedure after the withdrawal of the FXFINPRO license. The company, most likely, will not be able to repay its obligations in the near future, “for reasons directly related to its financial situation.”
At the next stage, the Fund will invite customers to file claims against the company, determining the procedure and deadline for submitting compensation claims. The fund will publish information in at least two local newspapers, including the address at which investors can be informed about the progress of their applications.
The amount of compensation paid to each client is calculated in accordance with the contractual conditions governing its relations with the broker, but in general, the maximum amount does not exceed 20 thousand euros.
Last year, CySEC changed the maximum amount of compensation, and now it is either 90% of the total claims, or 20 thousand euros, whichever is less. Thus, the compensation is at least 90% of the declared amount or 20 thousand euros. This means that an investor who claims to be € 50,000 to receive from the Fund 20 thousand euros. A client with a claim of € 10,000 will receive only 90%, that is, € 9,000.