CySEC Fines UFX.com €95,000 for failings to comply with certain investor protection requirements. The fine for the parent company of UFX comes as one of the lastest CySEC's attempts to safeguard investors across the island.
21 December, AtoZForex - The Cyprus Securities and Exchange Commission (CySEC) has published an announcement on its website in regards to one of the operating entities on the island. As a part of its regulatory activities, the CySEC has imposed an administrative finance penalty on Reliantco Investments Ltd. The company operates the Retail FX and CFDs brand UFX.com.
CySEC Fines UFX.com €95,000 over Investor protection failings
CySEC has imposed a total of €95,000 fine on the company. The regulator has decided on this regulatory measure due to the multiple compliance failings that violated the policies and procedures CySEC requires to ensure full investor protection.
According to the official announcement from the Cypriot watchdog, the fine is broken down to three parts:
- €40,000 for non-compliance with Article 36(1) of the Investment Services and Activities and Regulated Markets Law of 2007, as the Company did not act fairly, honestly and professionally in relation to the customer support services account managers provide to existing clients;
- €40,000 for non-compliance with Article 36(1)(a) of the Law and paragraph 6, subparagraphs (2) and (8) of 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, for failure to provide accurate, clear and non-misleading advertising materials to clients;
- €15,000 for non-compliance with Article 36 (1)(d) of the Law and paragraphs 15 and 16 of 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, as the Company did not obtain all the necessary and complete information to ensure customer suitability checks authorised appropriate investment services to each individual client.
UFX's parent firm did not meet CySEC standards
Following on this, the CySEC UFX.com parent company fine comes after the similar fines on the company from 2015. That time, the Cypriot regulator has imposed a fine on the company for the similar failings.
In fact, the CySEC has implemented a further follow-up scrutiny in order to guarantee full compliance with the laws. The inspection has revealed that even though a progress has been made, there were still some of the compliance failings that led to a risk of consumer detriment.
As CySEC Fines UFX.com €95,000 over Investor protection failings, CySEC chairwoman, Demetra Kaloregou, has commented:
"The Company has not met the standards prescribed by the laws we have in place to protect investors. The fine imposed on the Company for their failings to act in the best interest of their customers follows CySEC’s initial supervisory action towards Reliantco. A fine is not an end-stop action for investment firms regulated in Cyprus, and CySEC will not hesitate to use all the supervisory tools at its disposal to limit consumer detriment."
While deciding on the financial penalty, CySEC has taken into consideration the company’s corrective actions implemented under CySEC’s jurisdiction. This includes advancing its client onboarding processes and amending its promotion and risk warnings.
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