The news has been lighted up by articles about AFX Capital Markets Ltd having allegations from The Cyprus Securities and Exchange Commission (CySEC) about them breaking some of the rules of the regulations. The allegations can be a serious threat to the credibility of the company, based on the size it currently is. More specifically talks have been about them violating The Investment Services and Activities and Regulated Markets Law of 2007. Even though the allegations were very serious the two parties were able to come to a conclusion in the end.
In order to make this news as comprehensive as possible for you, we would like to offer it to you in the simplest terms possible. The reasoning behind this is that many traders that are beginners are using our website as their news source so we would like to be accessible for them as well and help them grow in the world of finance without having to grind all the terms. Simply put AFX Capital Markets Ltd has failed to follow some of the regulations that the CySEC has put out in front of them. To get a more specific look at the situation, we need to understand the regulation in details, regarding all the sections and etc. The company has violated section 28(1) which is regarding outsources.
It is clearly stated in the section that any activity about outsourcing any type of service needs to be delegated to the CySEC in a timely and orderly fashion, so the regulatory body has a chance to keep track of what is going on with the firms. Not only that, but the CySEC must be the regulatory body in this outsourcing process as well.
€50,000 is the amount that the sides have decided that AFX Capital Markets needs to pay for the damage it has cost to the CySEC regulatory body. The negotiations were quite smooth because AFX Capital Markets realized their mistake and took responsibility quite fast, therefore the amount due has already been paid fully.
This is not the first time a member of the AFX Group has been in trouble. Those of you who have been keeping track of this company may have noticed that they have been receiving some slack from the U.S. courts as well. Regarding the allegations, their subsidiary AFX Capital U.S. Corp has about seizing the balance of the now bankrupt Gallant Capital Markets Ltd.
We also believe that it is important to note that the subsidiaries have not been having good relationships either. We hope that AFX Group will spend more time and resources to keep its subsidiaries in check.