Cyprus' financial regulator CySEC has recently made a decision to suspend the (CIF) licence of Prior Capital CY Ltd, a Cypriot investment company previously known as PriorFx Ltd.

CySEC raised concerns about the conduct of the company and its management and subsequently suspended Prior Capital's license. The regulator believes that some of the company's conduct may not meet regulatory standards.

In particular, the broker was alleged to have failed to comply with the conditions of authorisation set out in Article 22(1) of the Cyprus Regulations and Article 17(9) of the same law, which mainly relate to organisational requirements and the security of client funds. Notably, the company's business model appears to be geared toward institutional clients such as hedge funds, small brokers, and professional investors.

Prior Capital CY Ltd's former brand, PriorFx Ltd, was fined €64,000 in 2017 for breaching regulatory obligations with its marketing materials. While CySEC did not provide a breakdown or specifics of the penalties at the time, similar decisions are often made because of a lack of internal manuals or records to assess whether a broker's marketing materials are compliant.

Prior Capital CY companies are obliged to take action within 20 days to comply with the necessary regulations and then apply again to reactivate their license. However, while the revocation of the license is in effect, the Company shall not enter into business relations with anyone, accept any new customers or provide any services.

In addition, Prior Capital CY must close any open positions and return the funds and profits if requested by the client for any of the above purposes. At the same time, the company must also upload a notice on all websites about the suspension of the use of its license, however, the company has not yet complied with this requirement.

If Prior Capital CY ultimately fails to address the compliance issues raised by CySEC, the regulator may initiate proceedings to revoke its authorization.

The recent spate of fines and suspensions by the Cypriot regulator, all aimed at tightening regulation of online trading, has left every investor with the question: is Cyprus still an attractive investment destination for retail brokers?

However, CySEC's move doesn't seem so bad. The survey found that at least one broker was brave enough to expand into Cyprus. According to a recent announcement by CySEC, TECFININE, the retail forex brand of a broker called TEC International (Cyprus) LIMITED, has been granted a CIF license on January 27, 2020.

CySEC explained some details of the Forex and CFD brokerage, which began operations at the end of 2019. TECFININE has only one senior executive listed on Linkedin named Gina Guo, who wears two hats as an executive director and sales manager at APOSTAR, a Singapore-based sourcing and provisioning company.