FXPRIMUS has become the latest company to enhance the protection of its clients’ funds by introducing additional parties into the process of handling transactions. The brokerage announced that it has appointed a newly-formed entity to oversee client transfers.
The partner company which will independently oversee all client funds' processes at FXPRIMUS is Boudica Client Trust. The entity is a subsidiary of The Boudica Group which is an international fiduciary services provider and a business consultancy based in Cyprus.
The Boudica Client Trust has been specifically formed for the purpose of overseeing client transfers at FXPRIMUS. The move comes days after the U.K. Financial Conduct Authority (FCA) regulated brokerage ayondo announced that it had purchased insurance on client funds for up to £500,000 ($775,000).
The team will be overseeing relevant transfers to payment processors and conduct daily reconciliations
The broker aims to ensure its clients that their funds are safe and that no issues with client withdrawals are likely to surface. A company representative explained that in order to facilitate the operational procedures and communications between the firms, FXPRIMUS' team which is responsible for funds transfers is located in the same building as the Boudica Group's personnel.
Elaborating on the details on how the monitoring will be effectively carried out, the Director & CEO of FXPRIMUS, Terry Thompson explained to Finance Magnates, “Boudica Client Trust will oversee the handling of all transfers, and for bank wires we have dual authorization to ensure that there is always oversight in any withdrawals leaving the client deposit account."
“In addition, the team will also be overseeing relevant transfers to payment processors and conducting daily reconciliations. In other words, the client can have a high degree of comfort that their funds are always being looked after,” he explained.
Asked about whether this might be a new trend in the industry, Mr Thompson said, “Any value add like the addition of an independent 3rd party to oversee client funds is always going to be welcome by clients who are looking for peace of mind.”
It's our belief that over time, clients are going to expect such value adds to be mandatory
“However, the cost and resources involved in putting extra measures like this in place is sometimes cost prohibitive for the broker. With that said, its our belief that over time, clients are going to expect such value adds to be mandatory rather than an option,” Mr. Thompson concluded.
According to FXPRIMUS, monitoring and oversight by the Boudica Client Trust will ensure timely processing without delays to the clients and serve as an additional insurance that the broker is operating within the regulatory framework in place in Cyprus. The local watchdog, the Cyprus Securities and Exchange Commission (CySEC ) has recently faced some potential irregularities.
Cyprus Regulated Brokers Withdrawal Issues
Recent irregularities at a couple of Cyprus regulated brokers have prompted FXPRIMUS to take extra measures to ensure its clients that their funds are safe with the brokerage.
CySEC has recently announced that it took action against CommexFX, suspending its license due to client funds irregularities.
The move must have come too late, as an investigation by Finance Magnates which delved deeper into the matter has revealed that the company’s owner is affiliated with another entity that is currently experiencing financial difficulties. That said, a source close to the situation denies that CommexFX is holding client funds at all.
Another company which has come under scrutiny by the online community is IronFX. Dozens of the firm's clients from China, and recently some European too, claim that they have pending withdrawals with the brokerage for months. IronFX has repeatedly stated that the reason for the delay is a group of traders who have allegedly been abusing the firm’s promotions.
While an abuse with bonus promotions is possible, IronFX has taken quite a while to determine which clients have taken advantage of the situation. Asked about the time window within which the broker aims to respond to the clients' withdrawal inquiries, an IronFX representative denied commenting on the matter.
Finance Magnates' reporters reached out to the Cypriot regulator CySEC asking questions related to client funds at the brokers mentioned above, however, at the time of publication an answer has yet to be provided by the watchdog.
