he Cyprus Securities and Exchange Commission, or CySEC, confirmed that the regulator was wholly suspending the Cyprus Investment Firm, or CIF, licensing of one UGL Exchange. UGL stood as a retail FX brokerage firm and had its CySEC support summarily removed.

Compromising Client Fund Security

CySEC has mandated the company to enact corrective measures within a set framework. Should they refrain from doing these corrective measures, more measures against UGL itself will be enacted, including the imposition of various fines, or even the complete withdrawal of their license.

The Cyprus-based watchdog didn’t provide any exact details when it came to the regulatory action in particular. However, the watchdog stated that the decision was based on possible violations to the mandatory “prudential requirements,” namely the funds and capital ratio of the UGL Exchange. Furthermore, the broker was flagged for a non-compliance when it came to the authorization conditions stated in the Law, section 17(9). That particular section is in regards to the organizational requirements of a company, as well as overall client fund security mandates

Given 30 Days To Fix It

While the UGL Exchange was contacted in a bid to get a comment from the firm, UGL has been tight-lipped about the matter, at least for now.

As it stands now, UGL Exchange has a timeframe of 30 days. Within those 30 days, the company must take the actions needed to comply with the specified provisions that CySEC has laid out for it. Within this 30-day period, UGL cannot provide any form of services to its clients, nor can it enter any form of business relationship with any person, as well. Furthermore, the company cannot take in any new clients within this time as well. Overall, this will have a far-reaching hit on the exchange’s user base.

Banning Any And All Financial Business Practices

The suspension goes further than that, as the broker is prohibited from executing any and all orders from its clients buying financial instruments. Furthermore, they’re not capable of providing any financial service within or without Cyprus.

The broker is further forbidden from advertising itself as an investment services provider, or any related advertisement along this vein. They are mandated to close all open positions when it comes to client contracts, doing so on their maturity date or upon request. Furthermore, the broker must return all funds and profits it has made.

With any luck, UGL Exchange will correct itself, and this entire matter can be put behind them before too much damage is done to their user base.