The Cyprus Securities and Exchange Commission (CySEC) has announced that several online brokerages have had their Investors Compensation Fund (ICF) membership withdrawn. As such, clients trading with these firms are losing the protection by the ombudsman regime in Cyprus, where the companies were registered as Cyprus Investment Firms (CIF), yet can still file claims against the companies if the trading or other operations in question happened before the withdrawal of ICF membership.
The regulator noted that “accordance with paragraph 6(3) of the Directive, the loss of ICF membership status does not mean loss of rights of covered clients to receive compensation in relation to investment operations carried out until the loss of membership status if the conditions for compensation are fulfilled pursuant to the Directive, nor does it obstruct the initiation of the compensation procedure for covered clients.”
Previously this year CySEC withdrew the Cyprus Investment Firm (CIF) authorizations of Whotrades Ltd and MGTM Financial Services Ltd.
Traders are advised to always check the regulatory status of the broker they wish to trade with prior to depositing funds to ensure they are protected.
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