ForexNewsNow – Renowned forex broker Markets.com announced the release of a full financial audit that contains a detailed description about the company’s as well as its traders’ funds. The audit was created after the recent Cyprus financial and baking crisis that forced the country to levy a huge tax on bank accounts located in the country.
Since Markets.com is located in Cyprus, may of the broker’s traders were afraid that their assets might be lost too due to the new levy that the Cypriot government implemented. This is the first audit of this kind released by a mainstream forex broker. Experts believe that the decision taken by Markets.com will determine other financial service providers to release their financial statements as well.
Markets.com Releases Funds Allocation Report
Markets.com just became one of the very first brokers to release a detailed report about the location of all the money owned by the company and deposited by traders. The report was officially audited and validated by the Cypriot agency KPMG. The report revealed that the broker keeps about 98% of its money outside of Cyprus.
Markets.com explained that only about 2% of the funds deposited by traders or belonging to the broker are held in Cyprus. This 2% in necessary in order to ensure the ongoing operations of the broker in the country, such as paying for staff, office, licensing and other. All the money that will not be spent in Cyprus is always transferred to United Kingdom, German and Swiss banks for safe keeping.
What this means is that the recent tax levy imposed by the government of Cyprus will have no effect whatsoever on the assets owned by the broker or the assets deposited by traders at the broker. Even though the company is officially registered in Cyprus, the Cypriot government is only able to tax bank accounts that are actually located in the country. Bank accounts located in other countries that belong to Cypriot companies fall outside of the Cypriot government’s jurisdiction.
This news will now reassure traders of Markets.com that their assets are being kept safe and won’t be lost due to this decision. Likewise, online trading analysts believe that the decision taken by Markets.com will set a precedent and determine other forex companies to release their financial audits as well. This in turn will result in the creation of a safer and more transparent forex trading business.
About the Cyprus Banking Situation
About a month ago the Cypriot government announced that it would implement a 6% tax rate on all bank deposits below EUR 100,000 and a tax rate of 9,9% on deposits above EUR 100,000. However, this measure was defeated by the Cypriot parliament. The tax would have been needed in to secure a joint EU and IMF bailout deal that would have allowed the country to prevent economic collapse.
However, the rejection of the measure was a wrong move since it only deepened the country’s financial crisis. A few weeks later the country was forced to implement a new tax on bank deposits that this time was established to be 30% on deposits above EUR 100,000.
This event is relevant to the global forex industry because a significant number of forex brokers are located and licensed in Cyprus due to the low tax rates the country offers. Traders were afraid that the implemented bank deposit levy would also affect their personal deposits. Brokers however argued that the majority of their assets are not located in Cyprus. With the newly published audit, Markets.com managed to prove that this statement is true.