The Cyprus Securities and Exchange Commission (CySEC) has withdrawn the license issued to Maxiflex Limited for violating compliance obligations. One of the violations that the forex and contracts-for-differences (CFDs) committed was mixing client funds with the company’s accounts.
Maxiflex’s Cyprus Investment Firm license withdrawn
The Cyprus financial market regulator confirmed that it was withdrawing the Cyprus Investment Firm (CIF) license issued to Maxiflex Limited on Monday because the brokerage firm had failed to take preventive measures to protect user funds. The company also said the board had decided on the matter on December 5, 2022.
The CySEC also noted that the brokerage platform failed to comply with the other articles in the Investment Services and Activities and the Regulated Markets Law of 2017. The articles that were violated by the brokerage platform revolve around the suitability of the company’s shareholders and the measures taken to protect client rights.
Maxiflex Limited failed to comply with the articles required by the regulatory body, indicating that it stopped complying with the licensing requirements. The CySEC added that the company failed to adhere to the authorization conditions.
The withdrawal of this license comes more than one year after the Cypriot regulator suspended the brokerage platform’s license. At the time, the CySEC said that the broker was conducting business activities not provided for in the authorization.
The Cypriot financial market regulator has also said that Maxiflex failed to comply with several sections of the Markets Law related to the suitability of the members of the management body and the shareholders. The regulator was also concerned about the suitability of the individuals who created the organizational requirements.
In November 2021, after the concerns aired by CySEC, Maxiflex Limited renounced its CIF license and halted all activities in the country. At the time, the company said it was no longer feasible to continue operating in the market.
The public register for CySEC shows that Maxiflex Limited obtained the CIF license in November 2014. The company operates in the country through multiple domains, such as www.europecapitalgroup.com, www.europefx.com, and www.europestocks.com.
Maxiflex to officially halt services
With this license being withdrawn, the Cypriot regulator has said that the brokerage company needs to eliminate all references to the investment services and activities available in the country. Maxiflex has also been urged to get rid of any reference to the licensing issued by the regulator and clarify that the CySEC no longer supervises it.
The CySEC has urged Maxiflex to investigate and resolve the customer complaints brought before it. Additionally, the broker should ensure it does not offer any investment and ancillary services.
As aforementioned, the broker operated in Cyprus using three domains. Two of these domain names have since been put up for sale and could potentially be bought by a company looking to offer financial products in Europe.
However, one domain, www.europefx.com, still has the message about the company renouncing the CIF license. The message also says that the company does not accept new clients or conduct investment activities or services.