The UK Financial Conduct Authority (FCA) followed the CySEC’s decision to suspend the financial services license of AFX. The company’s UK subsidiary AFX Markets Limited has been mandated to publish a notice on the websites of its brands: STO Financial Services, ICEFX UK and Quantic Prime.
The decision comes about two weeks after the CySEC suspended the license of the company in Cyprus. While at the time and will lapse in 10 days, the Cypriot regulator has not reaffirmed that the company can restart its operations. This week, AFX Group is losing its second European license.
The company is mandated by the UK’s FCA to close all open positions of its clients by the 7th of August and liquidate all positions to cash balances. According to the UK regulator’s website, the company and its agents or appointed representatives can’t conduct any regulated activities except with the FCA’s prior written consent.
Client Funds Frozen
After the firm closes all open positions of its clients it is mandated to hold all client money segregated for clients in accordance with the client money rules of the UK regulator. AFX Markets Limited must hold cash representing any monies due to clients who contract with the firm pursuant to title transfer collateral arrangements.
“The Firm must not, without the prior written consent of the Authority, make payments of any of the monies representing these balances to clients,” the FCA’s statement on the matter elaborates.
Commenting to Finance Magnates, a spokesperson for the company stated: “Our legal team is working with both regulators to clear the position of the AFX Group.”
The company is mandated by the FCA to notify all of its clients about the situation by the 7th of August 2019. The FCA also mandated the firm to secure all books and records and preserve information and systems relating to regulated activities carried on by it.
As mentioned above, the UK subsidiary of AFX Group is operating STO Financial Services, Quantic Prime and ICE FX UK. The subsidiaries and the parent company are not allowed to dispose of, withdraw, transfer, deal with or diminish the value of any of their assets, whether held legally or beneficially.
“For the avoidance of doubt, this includes any client accounts, custodian accounts or other account operated or held with third parties on the Firm’s behalf,” the FCA’s statement clarifies.
Back in September last year, the Cypriot financial regulator fined in the country €50,000 for marketing violations.