On November 27, 2015, the Cyprus Securities and Exchange Commission (“CySEC”) announced that it had reached a settlement with IronFX Global LTD (“IronFX”) for € 350 000. The settlement was reached due to possible violations of CySEC’s forex regulations, notably the Investment Services and Activities and Regulated Markets Law of 2007 (“the Law). The sections of the Law that may have been breached include:
1) Section 28(1): A Cyprus Investment Firm (“CIF”) must comply with the conditions under which their license was granted. There are two particular conditions that are relevant here:
- Section 18(2)(f): A CIF must have sound procedures and controls in place to assess the risk the it is taking on, and to safeguard information processing systems
- Section 28(2)(j): A CIF must safeguard client funds and prevent the use of client funds for its own account
2) Section 36(1): A CIF must act honestly, fairly, and in the best interests of its clients. There are many specific provisions that must be followed, but CySEC did not specify which provisions they had concerns with.
3) Section 38(1): A CIF must take all reasonable steps to obtain the best possible outcome for its clients when executing orders. When doing this, the CIF must take into account price, costs, execution speed, order size and other considerations. If there is a very specific instruction from the client, the order must be executed as specified.
IronFX agreed to the settlement amount of € 350 000 and has already completed payment.
So is IronFX a scam forex broker?
It must be noted that CySEC did not determine that IronFX actually violated the forex regulations. CySEC said that “…a settlement has been reached with IronFX for which there was reasonable suspicion of it committing possible violations…”. Therefore, we can’t assume that IronFX broke the law. However, if they did not break the law, why were they will to pay such a large sum of money to CySEC? Further, the possible violations of the Law are very serious, and if true, may have had negative consequences for the clients of IronFX. With so many other brokers out there to choose from, why pick one that has these kinds of issues?
IronFX is an online broker for forex, futures, spot metals and shares. IronFX is headquartered in Cyprus, has offices in 20 countries, and serves customers in 180 countries around the world. IronFX has affiliates licensed by the FCA in the United Kingdom, ASIC in Australia, CySEC in Cyprus, and UCRFIN in Ukraine.
Author: Forex Scam Alerts Google+