The Cyprus Securities and Exchange Commission (CySEC) last week announced the withdrawal of the Cyprus Investment Firm authorization of Prior Capital Cy Ltd, formerly known as PriorFX. The regulator indicated that they were “not satisfied with the company’s compliance with article 22(1) of the Law, as to fulfilling at all times the condition of article 17(9) of the Law, as further specified in paragraphs 4, 6 and 9 of Directive DI87- 01, regarding the safeguard of clients’ funds, hence meeting the conditions under which its authorization was granted.
Fortunately, Prior Capital is a member of the Investor Compensation Fund (ICF), which serves to protect the claims of covered clients and provide them with compensation in case a member couldn’t meet its financial obligations. As such, CySEC has indicated that customers of the broker will be protected by the Investor Compensation Fund (ICF). The broker, however, is not expected to pay back its obligations in the near future for reasons directly related to its financial circumstances.
The amount of the compensation payable to each client is calculated in accordance with the contractual terms governing his relationship with the faltering broker, but in general, the maximum amount doesn’t exceed €20.000. The next step, if any, will see the ICF inviting covered clients to make their claims against the company, designating the procedure for filing compensation applications and the deadline for their submission.