According to one of the recent announcements reported by the Cyprus watchdog, CySEC fines IQ Option €180,000. Why the brokerage is fined and which charges does the penalty include?
3 October, AtoZForex – The Cyprus Securities and Exchange Commission (CySEC) decided to impose a penalty on IQ Option Europe Ltd. The binary options brokerage was charged €180 000 for not complying with the law on Investment Services and Activities and Regulated Markets, with the Authorisation and Operating Conditions of CIF and with the professional competence of Investment Firms.
CySEC fines IQ Option: which charges are incorporated?
On the 30th of September, CySEC reported its decision to impose a fine on CySEC regulated binary options broker, IQ Option Europe Ltd. The measures were undertaken as the firm failed to comply with the Investment Services and Activities and Regulated Markets Law of 2007. Also, IQ Option did not comply with the Directive DI 144-2007-01 of 2012 of the Securities and Exchange Commission for the Authorisation and Operating Conditions of CIFs and the Directive DI 144-2007-02 of 2012 of the Securities and Exchange Commission for the professional competence of Investment Firms and the natural persons employed by them.
The total penalty amounted at €180 000, with the sum incorporating several charges. The fine of €35,000 was imposed as the binary options broker failed to comply with the authorization and operating conditions. The sum of €40.000 was charged for acting unfairly and unprofessionally in connection with the bonus terms and conditions that accepted by the Company’s customers. The amount of €15.000 was charged for providing customers with inappropriate information in regards to the nature and risks of the investment service offered.
Additional €40.000 were charged due to failure to ask customers to provide the brokerage with the necessary information related to their knowledge and experience. This is done with the aim to evaluate if the investment service or financial instrument is suitable for clients. The ultimate amount of €20.000 was imposed because IQ Option did not manage to get the best results for its customers when executing orders. Since strike and expiry prices used caused loss-making trades for clients instead of profitable trades.
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