Malta’s financial regulators, the Malta Financial Services Authority (MFSA) has announced on the 28th of January that it has fined Forex broker FXDD a total of 25,000 Euros for breaching rules laid out for Investment Services Providers (ISP). The announcement by Malta’s Financial Serivces Authority goes into very little detailing regarding the rules broken by FXDD Malta Ltd or how the regulatory breach was discovered. The regulator did however state that the firm was in breach of 2.01 of Part B1 of the Investment Services Provider rules.
Section 2.01 of the Investment Services Provider rules outlines how regulated firms are meant to act professionally, honestly and in the best interests of clients. With section 2.01 of the Invest Service Provider rules stating that “When providing Investment Services to clients, a Licence Holder shall act honestly, fairly and professionally in accordance with the best interests of its clients and shall comply with the relevant provisions of the Act, the Regulations issued thereunder, these Rules as well as with other relevant legal and regulatory requirements, in particular those set out in the Prevention of Money Laundering Act, 1994, and the Prevention of Financial Markets Abuse Act, 2005 and Regulations issued thereunder.”
FXDD Malta Ltd., was granted a MFSA licence back in early 2010 with the Maltese subsidiary being where the firm takes on non-US clients. The move by FXDD to open a Maltese subsidiary came after tightening of US regulations following the Dodd-Frank act of 2008, with Malta providing a favourable regulatory atmosphere for FXDD to bolster its global business. There are currently a total of 20 firms who hold MFSA Investment Services Provider licence’s, allowing these companies to passport their services to countries within the European Economic Area under MiFID. Swiss brokerage Swissquote also operates a Maltese based subsidiary allowing the firm to offer its services to non Swiss residents. The current FXDD fine is the first made by the Maltese regulator in 2014 and is the first fine to be issued since 2008.