AMF bans Rodeler Limited (24option) from providing financial services in France

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The service provider Rodeler Limited (regulated by the Cypriot financial regulatory agency) offers access to binary options, particularly Forex, and does not comply with certain professional obligations. The AMF has therefore decided to ban the company from providing services to both new and existing clients in France. This decision takes effect on August 1, 2016.

The decision was taken in application of Article 62 of MiFID and is a first for the AMF.

ASIC has already warned last month on Rodeler Limited, trading as 24Option, as unlicensed conduct, but the company has agreed to cooperate with the regulator.

Although the AMF does not have the authority to ensure that foreign service providers carrying out an activity in France under the free provision of services comply with the conduct of business rules, Article 62 of MiFID provides for a mechanism through which the host Member State may take appropriate measures to protect investors within its territory in cases where a service provider acts in a manner which is clearly harmful to the interests of those investors. This provision was transposed into French law as Article L. 532-21 of the French Monetary and Financial Code, and it enables the AMF to take “all measures required to protect investors and ensure the orderly functioning of the markets, including, where applicable, prohibiting the service provider concerned from continuing to provide services in France…”.

In this particular case, it was found that the service provider, Rodeler Limited, failed to comply, in France, with certain obligations relating to providing relevant information and acting in an honest and fair manner in the best interests of its clients, to the detriment of investors residing or based in France.

The decision to ban the company, taken as a precautionary measure by the AMF Board and which enters into force on 1 August 2016, includes, for the entire French territory (Metropolitan France, overseas departments, Mayotte and Saint Martin):

  • a ban on soliciting or entering into contracts with new clients;
  • a ban on continuing relations with existing clients, except for managing account closures (liquidating positions and withdrawing funds).

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