The Malta Financial Services Authority (MFSA) has today published an announcement from the Bulgarian Financial Services commission (BFSC) warning potential investors that the BFSC has received different signals regarding the activities of companies INVESTORS LTD (formerly ASTON MARKETS LTD) and 24 TRADE LTD (formerly EXXUS MARKETS LTD).
As a result of an inspection performed by the BFSC, it has been established that these companies act as introducing brokers for the company ISLANDBAY SERVICES LTD (Belize), with a trade name BROKER CAPITAL. The inspection also revealed that ISLANDBAY SERVICES LTD is a company registered in Belize and a license to carry on investment activities was granted by the Belize International Financial Services Commission on February 1st, 2014.
The company’s license is valid until the end of 2014. Under the laws of Belize, the issued license does not allow to ISLANDBAY SERVICES LTD to offer investment services or conduct trade in countries which legislation requires a license by the competent authority of the country to perform such activities. The Bulgarian Financial Supervision Commission warns that company ISLANDBAY SERVICES LTD is not licensed by the BFSC and hence is not eligible to provide investment services and activities under the Markets in Financial Instruments Act on the territory of the Republic of Bulgaria.
Furthermore the BFSC has not received any notifications from another EU member state that ISLANDBAY SERVICES LTD has received a license to provide investment services in the EU and accordingly on the territory of the Republic of Bulgaria.
Rather interestingly, MFSA presides over an entirely different jurisdiction than the BFSC, however the Maltese regulatory authority has begun publishing announcements pertaining to the findings of other European regulatory authorities, a practice which is uncommon among government departments unless collaboration has taken place in investigating the activities of a firm or individual.
This particular warning serves to illustrate the importance for brokers to ensure due diligence checks are carried out with regard to partners and introducing brokers, regardless of region and regulatory jurisdiction.