Spain expelling Cypriot Forex from its territory

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The regulator mainly examines CFD brokers based in Cyprus, and what CNMV reports is that they use overly aggressive tactics and practices.

The FNG website reported Tuesday that Spanish financial regulator CNMV is considering taking quite drastic action against foreign Forex and CFD traders, which could include banning many traders from providing services to Spanish traders.

The (possible) action will not be against sites for which the regulator is already trying to warn and in some cases block, but rather against brokers licensed from other EU countries using the MiFID “European Passport” license. Union “. The “European Union passport” system allows brokers (and other financial institutions) to be licensed in one country (usually their country of origin) and then to “transfer” the license and provide services in all other countries EU.

In the field of Forex and CFD, the majority of stockbrokers based in the EU are based in Cyprus and are licensed by the CySEC (Cyprus Securities and Exchange Commission) and the United Kingdom with an FCA license. However, the EU-UK licensing will be withdrawn from 31 December this year once the Brexit transition period is over. Transmission between EU Member States (excluding the now Brexited United Kingdom) will remain. Or will it remain, at least in its current form?

The report states that it holds a strategic document issued by the CNMV, the Spanish Securities and Exchange Commission, as part of the 2019 Strategic Review, which states that it has set up a committee chaired by President Sebastián Albella to review the practices of many of them. (licensed) foreign brokers offering services to Spanish Traders.

The regulator mainly examines CFD brokers based in Cyprus, and what CNMV reports is that they use overly aggressive tactics and practices.

In total, Spain has about 200 licensed domestic financial institutions, while around 3,500 EU “passport” companies – mainly foreign FX and CFD brokers – are licensed to serve customers in Spain.

If CNMV did such a thing, the post says, it certainly would not be unprecedented. It also notes that twice in the last few months, the UK regulator, the FCA, has taken action and banned seven brokers based in Cyprus in the UK. For its part, the FCA noted at the time that they were engaging in some questionable practices used by some of these brokers, such as the use of unauthorized celebrity social media authorizations and the “unbearable” pressure on customers to trade.

Edited by: Xenios Mesaritis