CySEC removes OptionRally and four other brokers from the Compensation Fund
The Cyprus Securities and Exchange Commission (CySEC) today released a new list of financial service providers that have been excluded from the insurance program. However, clients of the listed companies are still eligible for the Investor Compensation Fund (ICF).
The fund protects the claims of clients covered by the scheme and provides them with compensation in the event that a member is unable to meet its financial obligations. The most famous brand among the CySEC removed from the compensation system is the now-defunct OptionRally binary options broker. Following the company’s decision to relinquish its Cypriot license, OptionRally closed its operations in Cyprus almost a year ago.
Customers retain the right to compensation
A series of fines and license suspensions were imposed on OptionRally in 2017, but CySEC eventually cancelled previous fines after the company complied with its regulatory obligations. OptionRally, founded in 2010, obtained a CySEC license in 2013 when the Israeli brand began to enter new markets.
In addition to OptionRally, CySEC also removed Deloitte Investment Services Ltd, Rodeler Ltd, Stocks Forex AF Ltd and Globia Wealth Ltd. from the insurance program. CySEC explains that losing fund membership does not mean losing their rights to compensation for investments made before the loss of membership. The regulator also emphasizes that all claims of the removed entities towards the fund still need to be settled, regardless of the fact that they are removed from the program.
The next steps in the procedure
After the license is revoked, the regulator often starts the procedure of paying compensation to customers of a company that is unable to pay its liabilities. In the next step, if any, ICF invites clients covered by insurance to submit claims against the company, specifying the procedure for submitting claims for compensation and the deadline for submitting them. The fund then publishes details in at least two local newspapers, providing an address where investors can obtain information on the progress of their applications.