TriumphFX Faces CySEC Action Over Shareholder Issues

The Cyprus Securities and Exchange Commission (CySEC) has recently taken significant enforcement measures against local investment firm Triumph Int. (Cyprus) Ltd, the operator behind the TriumphFX trading brand. The move comes as a response to growing concerns surrounding the influence of its sole indirect shareholder, Chong Chun Hseung.

CySEC, the regulatory authority responsible for overseeing financial activities in Cyprus, has suspended Hseung's voting rights, which were exercised through the company's direct shareholder, CCH Triumph Cyprus Trust. In addition, the regulatory body has imposed a two-year ban on Triumph's executive directors, Christoforos Christoforou and Joel Prakash Benedict, prohibiting them from performing management duties.

This regulatory crackdown stems from a series of red flags raised in international markets, notably in Malaysia and Singapore, where TriumphFX and related entities have been featured on investor alert lists by local regulators. CySEC's action is based on the belief that Hseung's influence over TriumphFX poses a significant risk to the responsible and prudent management of the firm.

The enforcement measures are set to take effect after a two-month grace period, during which TriumphFX and its associated companies are expected to be removed from the investor alert lists in foreign jurisdictions. Should the company wish to challenge CySEC's ruling, it can seek a judicial review.

TriumphFX was included in the Singaporean Monetary Authority of Singapore (MAS) warning list on August 4, 2021, while the Malaysian regulatory agency added it even earlier, in 2020.

CySEC has indicated that its decision to take action is mainly intended to correct the situation and protect the interests of investors. Under local law, the regulatory body has the jurisdiction to take enforcement proceedings in circumstances where management concerns or excessive shareholder influence jeopardize the stability of registered investment enterprises.

Furthermore, CySEC has revealed its ongoing commitment to ensuring regulatory compliance by announcing its search for experts specializing in identifying potential regulatory violations. The regulatory body has issued a new public tender seeking two experts for this undertaking, with a value of €240,000.

CySEC's justification for the enforcement of measures against TriumphFX hinges on the view that undue shareholder influence can have serious repercussions on the operation of investment firms. Suspending Hseung's voting rights as the ultimate beneficial owner effectively severs his decision-making control over the company. Similarly, prohibiting the executive directors appointed by him from managing the firm significantly curtails his influence over day-to-day operations.

The two-month implementation timeline allows TriumphFX the opportunity to address the investor warnings that have landed it on the alert lists in Singapore and Malaysia. In essence, CySEC has taken targeted steps to neutralize the mechanisms through which Hseung exerts control, to motivate the resolution of the outstanding alerts. The regulatory authority emphasizes that this approach is essential for ensuring sound governance and prudent management of regulated entities.

About CySEC

The Cyprus Securities and Exchange Commission (CySEC) is the regulatory body responsible for supervising and overseeing financial activities within the Republic of Cyprus. Established in 2001, CySEC's primary mission is to ensure the stability and integrity of the financial markets in Cyprus while protecting the interests of investors. CySEC is committed to enforcing high standards of regulatory compliance to maintain trust and transparency in the financial sector.