In a continued crackdown on the Retail FX and CFDs brokerage sector, Cyprus financial regulator CySEC has announced that the operating license of the Cyprus Investment Services Company VPR Safe Financial Group Limited, CIF number 236/14, has been partially suspended.

CySEC said that VPR Safe Financial Group Limited, which operates the Alvexo online trading brand (at websites alvexo.eu, alvexo.fr, and alvexo.de) is suspected of:

A. Possible non-compliance on the part of the company or through the affiliated representative of France Safe Media (‘the SA’), which has been appointed and acts on its behalf in France, by:

1. Article 22(1) of the Investment Services and Activities and Regulated Markets Law of 2017 (‘the Law’) as the Company does not appear to be in continuous compliance with the condition that is set out in article 17(2) of the Law regarding the organizational requirements with which CIFs must comply (establishment of appropriate policies and procedures).

2. Article 25(1) of the Law as the Company does not appear to act fairly, honestly and professionally when providing investment services to clients.

3. Article 25(3)(a) of the Act as the Company does not appear to ensure that all information, including advertising communications, which it addresses to customers or potential customers, is accurate, clear and not misleading.

4. Article 42 of Regulation (EU) no. 600/2014 since the Company does not appear to comply with paragraph 5 of the Directive on the Restriction of the Provision, Distribution and Sale of Contracts for Differences (CFDs) to Private Clients (OG 87-09), regarding the prohibition of participation in circumvention activities.

5. Article 26(1) of the Law as the Company does not seem to ensure that the natural persons who provide investment advice or information to clients on behalf of the Company have the required knowledge and skills to fulfill their obligations.

6. Article 26(3)(a) of the Law as the Company, when providing its investment services, does not appear to obtain from the client information regarding his knowledge and experience in the investment field, in relation to the specific type of product or service offered or requested, so that it can assess whether the proposed investment service or product is compatible with the client.

B. Possible violation by the Company of article 30(2)(b) of the Law as it does not appear to control the activities of the SA to ensure that it continues to comply with the Law.

Partial suspension of the Company’s operating license means the prohibition of providing / exercising investment services / activities in the territory of France, including the provision of services through the SA, which also means the following:

1. Prohibition of accepting new clients from the territory of France and concluding with those in a business relationship.

2. Prohibition of advertising as an investment service provider on French territory. To ensure this, it is not allowed to promote/advertise services to customers or potential customers in the territory of France and to communicate, in any way, with customers or potential customers in the territory of France for this purpose either by the Company itself or through third parties with whom the Company cooperates for customer support, including SA.

3. Prohibition of receiving new deposits from existing customers from the territory of France, unless this concerns the exclusive case of covering the necessary initial margin of an existing open position and at the same time following their own express request.

The above decision was taken on the basis of findings communicated to the Company by the competent supervisory authority of France, Autorité des marchés financiers (‘AMF’).

The Company must, within two months, take the required actions to comply with the above provisions.

Throughout the suspension of its operating license, as provided for in article 9 of OD87-05, the Company, if its existing customers so wish, may proceed with the following actions without being considered to be violating the provisions of article 9( 7)(a) of OD87-05:

1. Complete all its own transactions and those of its clients which are before it, in accordance with client instructions.

2. Return all funds and financial instruments which are attributable to its clients.

Alvexo parent VPR was fined €100,000 last year by CySEC, settling charges of CFD marketing violations.