Liquid Markets (LQD Markets) announced yesterday that it was closing its Cypriot location as of July 7th and transferring its ongoing activities to its U.K. office. All clients' accounts will be migrated to London and will be regulated under UK's Financial Conduct Authority (FCA). On July 6th, all the customers' positions and orders will be assigned to the UK entity together with all personal data and documentation, trading history and cash balances.
Account holders at the Cyprus branch of Liquid Markets will be asked to sign a new list of Terms & Conditions of LQD Markets (UK) Ltd in order to conclude their former agreement. Those clients who oppose the transfer of their funds to the UK entity will be required to close or remove all their open positions and withdraw their funds from their accounts by July 4th.
Liquid Markets was founded in 2006 as an online Forex and CFDs broker under the name Tadawul FX. It changed its name to Liquid Markets in 2012 and received Cyprus Securities and Exchange Commission (CySec) regulation at that time. In June, 2013, the brokerage was required to pay €80,000 in penalties following a compliance inspection carried out by CySec.
The FCA regulates firms and financial advisers in the U.K. so that markets and financial systems remain stable and compliant. They also encourage transparent pricing for everyone to understand. CySec, on the other hand, is the independent public supervisory authority responsible for the supervision of the investment services market and transactions in transferable securities carried out primarily in the Republic of Cyprus.
There is a perception among brokers that CySec regulation is less stringent than FCA or other regulatory agencies and this attracts brokers to locate in Cyprus. However, there is no basis for this hypothesis and many Forex brokers with Cypriot domains find themselves shutting down their activities after only a short period of time.