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Cyprus-regulated brokers - regulation

  • #41
  • Mar 24, 2016 3:22pm Mar 24, 2016 3:22pm
As I stated in my post, the ones talking down the importance of regulation, do this for a reason.....

New forum members do not be naive and take every advice given on these forums on board. Evasive arguments off topic has normally little substance in them.

Arguments down-playing the importance of regulation makes me really wonder.....

The best brokers or brokers worth using won`t bother to unofficially venture into these forums. Some brokers have official representatives posting, that is legitimately and a serious approach. New members know that it is an brokerage official they communicate with.

The not so serious approach, is to market their brokerage with so called forum members giving about their offerings and quality.
Do not let the cost of being wrong, exceed the prize of beeing right
  • #42
  • Mar 24, 2016 4:08pm Mar 24, 2016 4:08pm
Quoting Decima
As I stated in my post, the ones talking down the importance of regulation, do this for a reason..... New forum members do not be naive and take every advice given on these forums on board. Evasive arguments off topic has normally little substance in them. Arguments down-playing the importance of regulation makes me really wonder..... The best brokers or brokers worth using won`t bother to unofficially venture into these forums. Some brokers have official representatives posting, that is legitimately and a serious approach. New members know that...
Regulation is useless as it does not prevent fraud and criminal activity. It punishes such behavior. It's like police showing up after you're with your pants down and robbed of your wallet and iPhone, asking about hair and eye color of your attacker. Pretty useless.
No amount of regulation can stop criminal behavior in the financial industry - look at the FOREX and Libor manipulation scandals, where the biggest banks in the world - Morgan Stanley, Barclays and RBS were fined $6 BN for their crimes. These Cyprus regulated "brokers" are no different.

If you had a gun, the hair and eye color of your wallet robber (along with the brains splattered on the pavement) would be there for the Police officer to see himself. But then you'd be in jail for murder while being accused of planting your wallet in the victim's hand to make it look like a robbery. Translate this into your relationship with a broker, and the regulation is the Police force.
Best regards, Zef
  • #43
  • Mar 25, 2016 3:31am Mar 25, 2016 3:31am
Quoting ZeF
{quote} Regulation is useless as it does not prevent fraud and criminal activity. It punishes such behavior. It's like police showing up after you're with your pants down and robbed of your wallet and iPhone, asking about hair and eye color of your attacker. Pretty useless. No amount of regulation can stop criminal behavior in the financial industry - look at the FOREX and Libor manipulation scandals, where the biggest banks in the world - Morgan Stanley, Barclays and RBS were fined $6 BN for their crimes. These Cyprus regulated "brokers" are no...


Look at the Alpari UK bankruptcy incident and the results afterwards. This is what regulation can do. I think consequences is a key-word debating this. Like with all law/regulation that is purposed to regulate behaviour, there must be sanctions towards the cases that breaks this law/regulation. Sanctions = consequences. Look at the IronFX incident in contrary to the Alpari UK example. Sufficient sanctions? Easy mathematic, plus and minus, how much is gained.

Capitalism and the free market that regulates itself is just for all participating in it, it is based on skill and ability. That is what everyone seeking from the smallest retail-trader to the bigger fish. Recent history is full of examples of this not beeing true. Markets are often rigged, either on purpose or that influential elements of it connected to it have painted themselves into the corner. I believe in the free market, wich is regulated to some degree, to secure that it is free....

With a little more effort you could come up with a lot more examples of fraudulent behaviour than the two you mentioned.

Read more about these two mentioned incidents, see what the consequences was for the involved afterwards.

Signs for a good regulation is:

1) They are in line with general moral perception -> if the majority is reacting to something, then this is the general moral perception.

2) They are working and will be used when the rules of good behaviour are broken -> this leads to known examples of fraudulent behavior

3) There are sufficient sanctions for the ones that have broken the rules -> licenses withdrawn, sufficient fines, negative statements etc. Purpose should be to hinder
the continuation of fraudsters operating as well as informing the public about them.

So by coming with examples like this, you are proving that those regulations worked for those cases.

Let`s debate this and stick to the facts, argumenting what is relevant and not try to confuse or mislead people.
Do not let the cost of being wrong, exceed the prize of beeing right
  • #44
  • Mar 25, 2016 11:53am Mar 25, 2016 11:53am
Quoting Decima
{quote} Look at the Alpari UK bankruptcy incident and the results afterwards. This is what regulation can do. I think consequences is a key-word debating this. Like with all law/regulation that is purposed to regulate behaviour, there must be sanctions towards the cases that breaks this law/regulation. Sanctions = consequences. Look at the IronFX incident in contrary to the Alpari UK example. Sufficient sanctions? Easy mathematic, plus and minus, how much is gained. Capitalism and the free market that regulates itself is just for all...
Good points. However...

The people who got their money back from the Alpari explosion, did so mostly thanks to the FCA in the UK. Do the CySec have this compensation scheme? Not sure. So my thought is - fines to the broker or jail time for the scammers, or any other consequence, is nice and can be enforced, but it is irrelevant to the Joe who had his profits withheld or his account blown up from a black swan event.

The banks who rigged the LIBOR got some hefty fines - but nobody knew how much they stole, as the matter never went to court. They just settled for that amount and it was done. Did the people/institutions who lost money being on the other side of those bets, get their money back? I don't think so. So that is my point - if there's no independent party guarantee the amount up to a certain sum, then really you are all alone there, and fines or other punishments, really mean jack shit for your pocket.
Best regards, Zef
  • #45
  • Edited 4:01pm Mar 25, 2016 3:51pm | Edited 4:01pm
Don`t misunderstand me, I am not advocating CySec regulation, I would never put my money into such a regulation.

The black swan didn`t discriminate, it cut the ropes for many more market participants than retailers. This is the risk of beeing in the market, or are you suggesting that regulation should act in the market? Because that is what the black swan was, a market move...

We are classified as retailer traders, certain regulations gives us extra protection with this operating status. If a retail trader is fooled for his 500 USD deposit, at wich regulation do you think he would have the biggest odds of retrieving his money or atleast complain and try to make amends?

If you were to start cheating people with an brokerage where would you not open this brokerage?

You will after a while find out that you will have to look after yourself, I agree. Regulation is for you to use, they will not monitor your dealings with your broker. It is something you bring to the table if needed.

You could also be dealing with a bank, there is nothing preventing them from earning a pip on you by giving you an entry with this disadvantage. No one else than you could make amends about this. I could mention houndreds of other examples where you must govern your own dealings with your broker, you must stand up for yourself and stop any possible disadvantages against you. Still, to do this, it needs to be in an regulated enviroment.

The chances of you beeing succesful in making these amends, dramatically increase when you have an potent regulator in the shadows. The world is full of bullshit, also the forex industry, do not be naive. There are good options even for retailers out there. Do due dilligence before choosing brokers. Regulation should be part of this due dilligence.
Do not let the cost of being wrong, exceed the prize of beeing right
  • #46
  • Mar 25, 2016 4:27pm Mar 25, 2016 4:27pm
Quoting etrade
Cyprus is a popular country for forex brokers (I don't know why), and thus there are many CySEC-regulated brokers. They gain the fact that Cyprus is part of EU, and then, they are regulated at EU level. Is CySEC as reliable as FCA? Cyprus is a country in which banks bankrupts, then how much regulatory protection is reliable? There are some good brokers (services and specifications based in Cyprus, and it is not easy to ignore them, but Cyprus-based fact makes it a little bit shaky.
Answer: They are propped up by the Russian mafia for laundering money.
  • #47
  • Mar 26, 2016 8:07am Mar 26, 2016 8:07am
Quoting etrade
{quote} A non-regulated (or weakly regulated) broker can take the money and run OR file for bankruptcy. Who can stop the broker?
like alpari-uk, which is regulated by FCA.
Forex Philosopher
  • #48
  • Mar 26, 2016 8:33am Mar 26, 2016 8:33am
Quoting Master-Mind
{quote} like alpari-uk, which is regulated by FCA.
What happens with the clients after the bankruptcy has been filed, is the major concern. Regulation is not a guarantee against bankruptcies. A good regulation comes into play after the bankruptcy, on behalf of the clients of the company going down.

The FCA is proven to be a good regulator in the example you mention. Clients have received most of their funds back..
Do not let the cost of being wrong, exceed the prize of beeing right
  • #49
  • Mar 27, 2016 6:03am Mar 27, 2016 6:03am
Quoting Decima
{quote} What happens with the clients after the bankruptcy has been filed, is the major concern. Regulation is not a guarantee against bankruptcies. A good regulation comes into play after the bankruptcy, on behalf of the clients of the company going down. The FCA is proven to be a good regulator in the example you mention. Clients have received most of their funds back..
What raise a big question mark is: Did Alpari really suffered bankruptcy or IT invested CHF-crisis to escape with accumulated millions through years\!
they are Russian and smart enough to put deliberate and scheduled plan, may through legal ways!
Forex Philosopher
  • #50
  • Mar 27, 2016 7:34am Mar 27, 2016 7:34am
Quoting Master-Mind
{quote} What raise a big question mark is: Did Alpari really suffered bankruptcy or IT invested CHF-crisis to escape with accumulated millions through years\! they are Russian and smart enough to put deliberate and scheduled plan, may through legal ways!
Well, my concern would be to get my funds back after the bankruptcy. Sure the world is full of misdeeds and misdemeanours, anything is possible. I don`t know if the rusisians are any worse than the americans or the norwegians for that matter.

It has more to do with type of people with certain traits. You will find these within all nationalities, so pointing your finger towards a certain nationality I don`t agree with.

The biggest scam/fraud migth be when the tax-payers all over the world, has to pay for the forthcoming financial crisis. If metaphorically comparing with the asteroids regularly hitting our earth and atmosphere, the next financial crisis would be like the asteroid that created the Chicxulub crater.

We all will have to pay the bill, whilst a few will enrich themselves on it. Fair? not at all. Still these things have happened before. The difference this time will be the scale of it..

I don`t like to be fooled, so that is why I try to avoid it at the levels I can influence. Again, choose a broker with a good regulation..
Do not let the cost of being wrong, exceed the prize of beeing right
  • #51
  • Mar 28, 2016 6:42am Mar 28, 2016 6:42am
As I said earlier in other thread:

FCA cares and fights for UK citiens, ASIC for Australian traders, NFA for US traders, they don't need you if you somewhere from the back of beyond.
The'll never deal with your case or your complaints, just foolish promises.
Based on my experience.
  • #52
  • Mar 28, 2016 7:01am Mar 28, 2016 7:01am
Quoting leebsurag
As I said earlier in other thread: FCA cares and fights for UK citiens, ASIC for Australian traders, NFA for US traders, they don't need you if you somewhere from the back of beyond. The'll never deal with your case or your complaints, just foolish promises. Based on my experience.
Are you familiar with a large part of EU law protecting the retailers/consumers in different areas. This law`s starting points are not the nationalities of the consumer/retailers affected but to which regulation the company is subject to.

So you are claiming that this is different with the FCA and the regulation for forex brokers?

Could you clarify your experience on this matter?

I have personally contacted the FCA to receive an answer to this question. I should have it within two working days. Due at wednesday. I will give the result to my enquiry in these threads.

The below link are interesting read:

http://www.telegraph.co.uk/finance/p...ent-firms.html
Do not let the cost of being wrong, exceed the prize of beeing right
  • #53
  • Mar 29, 2016 1:47am Mar 29, 2016 1:47am
I would like to bring to your attention a major Cyprus Securities and Exchange Commission (CySEC) regulation issue affecting the clients of Falcon Brokerage. You may well know there are many Forex Brokerages in Cyprus. I believe the majority of Cyprus Brokerages are not in business to offer and honest service rather than to take advantage of clients and their deposits; however, it would appear that this is not the case with Falcon Brokerage. I am a Falcon Brokers Ltd. client. Falcon Brokerage runs a regulated operation governed by the CySEC [license number 128/10]. The company has been insolvent since July 2015. CySEC published this fact in late September 2015. The company has been granted numerous extensions by the regulator, offering Falcon a chance to fix their problems. CySEC, however, has refused to share their findings or reasoning as to why said extensions are justified or can be reasonably expected to be effective. Moreover, the clients are still clueless as to the status of their monies. In fact, the owners and the shareholders of the company have ceased operations altogether but, extraordiarily, CySEC is not willing to consider the liquidation of the company. Its been nine months since clients began confronting these issues and it would appear from CySEC's actions that they are not interested in causing the return of clients' monies. This appears consistent with other recent challenges to CySEC-regulated companies such as, notably, IronFX and Banc De Binary, where the clients faced similar issues but where all that CySEC has done is to fine the companies, collect the fines, and refrain from returning funds to their rightful owners. I plan to further proceed with a law suit against Falcon Brokerages. Our attorney indicates the shareholders of the company are attempting to flee prosecution. Here again CySEC appears tobe failing to do what is necessary to protect investors. I recall a situation in Australia when a similar brokerage company was unable to meet its capital requirements: The passports of the shareholders were seized by the regulators. CySEC, in spite of overwhelming evidence of criminal intent of the part Falcon Brokerage principals, have allowed the principals to remain free to leave the country with client funds. In short, CySEC has made no reasonable efforts to secure the protection and return of client funds. One has to ask oneself what is the substance, if any, behind these mandatory regulations. My understanding is that the Falcon Brokers principals set up the brokerage not to provide brokerage services, but to collect and the abscond with the client deposits. The nominal purpose of regulators is to protect the interests of their regulated firms' clients against, among other things, just such actions. But in CySEC's case it appears the actual purpose is to shield their charges from being accountable for criminal activities. The clients have ultimately no natural recourse available to recover their monies. A social media campaign is the last resort measure we have. Our intention is to shame the relevant regulators into taking appropriate actionings against the Falcon Brokers in order to effect the return of the client funds to the clients. I would appreciate your effort on this matter.
  • #54
  • Mar 29, 2016 6:16am Mar 29, 2016 6:16am
Voipey, sorry to hear about your misfortunes. The best of luck with your proceedings.
Do not let the cost of being wrong, exceed the prize of beeing right
  • #55
  • Mar 30, 2016 12:56pm Mar 30, 2016 12:56pm
I received an answer from the FCA today.

My enquiry/question to the FCA was: Do the FCA regulation only affect british citizens?

They answered the following: NO, if the firm/company is regulated by the FCA, all customers hold the same rights independent of their nationality.

So.... Anyone claiming the opposite are giving deceptive and misleading information to other forum members.

This should be carved in stone from now on...
Do not let the cost of being wrong, exceed the prize of beeing right
  • #56
  • Mar 30, 2016 1:43pm Mar 30, 2016 1:43pm
Quoting Master-Mind
{quote} like alpari-uk, which is regulated by FCA.
No one took the money and ran. The alpari case is a bad example actually as it was a very special case. Money is segregated which is a good thing but it's not enough to reach absolute security (in fact there will never be 100% security). Segregated means the money is segregated from the company but not from each individual client. Client money is pooled, considering there is a lot of small and smallest fish that makes perfect sense. The problem arises in the rare case of client debt which is what happened with alpari (and basically all other brokers who went belly up that day).
  • #57
  • Mar 30, 2016 5:51pm Mar 30, 2016 5:51pm
Quoting Decima
They answered the following: NO, if the firm/company is regulated by the FCA, all customers hold the same rights independent of their nationality. So.... Anyone claiming the opposite are giving deceptive and misleading information to other forum members. This should be carved in stone from now on...
You need to be carefull of the following: a FCA license company setup an overseas office (say China, russia) with local employees, start collecting deposits into local banks and signing up customers in local branch with Non UK residents by advertising 'FCA' regulation. If that office close and money disappeared, those clients will not be able to contact FOS/FCA to complaint. That overseas office is legally a separate entity.

But if those non UK residents clients sign up on the broker's UK website and deposit money into UK bank acct, those clients are protected by FCA/FOS as mentioned above.

Otherwise why do brokers have multi jurisdiction regulation license?. Just have FCA license and be done with it !!
  • #58
  • Mar 31, 2016 12:56am Mar 31, 2016 12:56am
Quoting reddevil
{quote} You need to be carefull of the following: a FCA license company setup an overseas office (say China, russia) with local employees, start collecting deposits into local banks and signing up customers in local branch with Non UK residents by advertising 'FCA' regulation. If that office close and money disappeared, those clients will not be able to contact FOS/FCA to complaint. That overseas office is legally a separate entity. But if those non UK residents clients sign up on the broker's UK website and deposit money into UK bank acct, those...
Yes, totally agree. Be thorough in your due-dilligence. Contact and talk to the broker. Check with FCA or other regulation as well. There is a register at their website. Contact the regulators as well. They will answer your questions.

This thoroughness you will need with your trading. No impulses just a considered decision that leads your actions.
Tthis link is related to your comments, I have already posted it: http://www.telegraph.co.uk/finance/p...ent-firms.html

Probably seen by many already, still here is one version of how wrong this can go:
Inserted Video
Do not let the cost of being wrong, exceed the prize of beeing right
  • #59
  • Mar 31, 2016 1:29am Mar 31, 2016 1:29am
Quoting Decima
{quote} Yes, totally agree. Be thorough in your due-dilligence. Contact and talk to the broker. Check with FCA or other regulation as well. There is a register at their website. Contact the regulators as well. They will answer your questions. This thoroughness you will need with your trading. No impulses just a considered decision that leads your actions. Tthis link is related to your comments, I have already posted it: http://www.telegraph.co.uk/finance/p...ent-firms.html...
Guys dealing with a lot of broker bankruptcies, I realised that FCA does not intervene if the company is licensed by FCA. It only intervenes if it's licensed and regulated by FCA.
  • #60
  • Mar 31, 2016 2:12am Mar 31, 2016 2:12am
Quoting Voipey
{quote} Guys dealing with a lot of broker bankruptcies, I realised that FCA does not intervene if the company is licensed by FCA. It only intervenes if it's licensed and regulated by FCA.
Yes, this is very important. A license is not what we are looking for. You need to know that the firm is regulated by FCA. Also, if the brokerage has departements under multiple regulations, you need to verify under wich regulation you will accounted for.
Do not let the cost of being wrong, exceed the prize of beeing right
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