February 22., 2016, Budapest – If Cyprus-based IronFX Global Ltd, offering cross-border investment services in Hungary, does not reimburse its customers’ claims despite their requests, those affected are advised to consider the possibility to submit their claims to the Financial Ombudsman of Cyprus.

After the previous year’s client reports, around 120 consumer complaints have been received by the Magyar Nemzeti Bank (MNB) since the end of January, claiming that IronFX Global Ltd does not make payments despite being so required by customers, i.e. investors do not have access to their funds despite their requests. Most of the customer reports came as English forms, which were most likely submitted to the Securities Supervisors of European countries where IronFX Global Ltd provides investment services. Also, only in February, almost 50 Hungarian customer claims were received by the MNB.

IronFX Global Ltd provides cross-border services in Hungary, therefore it falls under the jurisdiction of the securities supervisor of Cyprus (Cyprus Securities and Exchange Commission, CySEC), not the MNB. In 2015 it was announced by CySEC that an investigation against IronFX Global Ltd was being conducted with regard to possible infringements of the legislation. This investigation was completed in late 2015 and the decision of the CySEC Board was announced on the 27th November and may be found here. .

According to CySEC’s new complaint submission procedure, which was implemented on 1st January 2016 and is available in English, the investors affected have to submit their claims to their financial service provider. In case the claim is rejected or handled incorrectly, the claims can be submitted to the Financial Ombudsman responsible for the examination of complaints against financial institutions with a view of reaching an out-of-court settlement of the dispute, at the following e-mail address: complaints@financialombudsman.gov.cy. If the investigation does not yield any results, the claim can be taken to court in Cyprus. It has to be noted that the complainant maintains the right, at any stage in the process, to submit his/her claim for damages to court in Cyprus. Should this be decided the examination of the complaint by the Financial Ombudsman will cease.

In light of this incident, it is necessary to draw attention to the risks of employing cross-border investment services, as foreign service providers are under the jurisdiction of foreign Supervisory Authorities and foreign jurisdiction, i.e. they are not subject to the Hungarian investor protection framework. The MNB has previously drawn attention to this on several occasions.

Magyar Nemzeti Bank