The Cyprus Securities and Exchange Commission (CySEC) has announced the suspension of the CIF licenses of Maxiflex Ltd and Maxigrid Ltd. The licenses were revoked after the two firms violated laws that threatened the market’s integrity.
According to the regulator, the two firms violated the Cyprus Investment Firm license by not adhering to the ‘Investments Services and Activities and Regulated Markets Law.’
Given One Month to Comply
The regulator further stated that the two firms had a timeline of one month, in which they needed to take measures that would make them compliant with the said laws. Once compliance is achieved, the regulator will restore the CIF licenses of the two firms.
With the licenses suspended, Maxiflex and Maxigrid will no longer be permitted to conduct any investment activities or enter into financial transactions with any party. The two have also been barred from onboarding any new clients.
In addition, the two firms are also prohibited from engaging in any marketing campaigns that promote them as ‘providers of investment services.’ These restrictions will hold until the two meet to comply with the guidelines of the CIF license.
The Cyprus financial market regulator also noted that “the company, provided this is consistent with the wishes of its existing clients, may proceed with the below actions, without such actions being considered a breach of section 7(a) of D187-05: 2.1. Complete all its own transactions and those of its clients which are before it, in accordance with client instructions.2.2. Return all funds and financial instruments which are attributable to its clients.”
Maxigrid is yet to update its website to reflect CySEC’s orders. The company’s website still states that it holds a valid CIF license issued by the CySEC.
CySEC’s Crackdown on Non-Compliant Firms
In September, the regulatory body announced that it had revoked the CIF license of London Capital Group (Cyprus) Ltd. The regulator noted that the firm had failed to comply with the specified compliance requirements.
Moreover, the CySEC stated that the firm had failed to appoint at least two directors as was required. The firm’s license was revoked on June 14 following a meeting by the Cypriot regulator.
The regulator stated that London Capital Group was barred from offering any investment and ancillary services as part of the revocation. The firm was only restricted to settling pending transactions on behalf of the firm or its clients. The suspension of the licenses of the two firms shows the regulator’s strictness to ensure compliance.