The Cypriot financial watchdog
has issued a €1 million fine against Itrade Global (Cy) Limited, an operator of
several forex/CFDs brands, for multiple violations of Cyprus’ market laws
allegedly committed by its tied agent in Spain. The Cyprus Securities and
Exchange Commission (CySEC) disclosed the fine on Thursday, noting that it
reached the decision earlier on April 3.
CySEC Picks Hole in CIF’s 2020 Activities
Itrade Global, a Cyprus Investment
Firm (CIF), was licensed in 2016 by CySEC and operates three approved
forex/CFDs brands: TradeFW, InvestFW and TradedWell. However, the regulator
said it found several violations of its law following its 2020 inspection into the activities of the company’s intermediary in Spain. The investigation was aided by the Spanish
National Securities Market Commission (CNMV).
According to CySEC, Itrade
Global through the tied agent failed to take appropriate measures to identify
and prevent or manage a conflict of interests, did not act fairly, honestly and
professionally when providing investment services to clients, and did not ensure
that all information addressed to clients was fair, clear and not
misleading.
Furthermore, CySEC alleges that
the brokerage operator through the intermediary failed to ensure that natural
persons providing information about financial instruments, investment services
or ancillary services to clients on its behalf possessed the necessary knowledge and
competence to fulfil their roles under the Investment Services and Activities
and Regulated Markets Law of 2017.
In addition, the CIF through the
intermediary failed to demand appropriate information about clients’ knowledge
and experience so as to determine whether the product or service they were to be offered was appropriate for them. On top of this, the company failed to warn clients after they completed an appropriateness test, that the product or service they were about to be offered was not appropriate for
them.
CySEC Alleges More Failures
Moreover, CySEC alleges that
Itrade Global failed to put in place adequate policies and procedures
sufficient to ensure compliance with its obligations under the country’s markets law. Also, the company failed in its duty of ensuring that relevant risks to identified target markets
of its end clients were assessed and that the intended distribution strategy
was consistent with the said market.
Further, the CIF failed
to keep records of telephone conversations of services it provided and the
transactions or activities performed under them.
Commenting on the case, George
Theocharides, CySEC’s Chairman, urged CIFs to ensure full compliance with
their regulatory obligations. Moreover, the CySEC boss emphasized the need for CIFs to strengthen their compliance functions and reevaluate the
competence of their staff, especially those engaged in sales and marketing
duties.
“CySEC takes any misconduct by
supervised entities seriously and is determined to bring non-compliant
operations to a halt in order to enhance investor protection and the
responsible growth of the investment sector,” the CySEC Chairman added.
CySEC’s warning; new features on Fortex’s XForce; read today’s news nuggets here.
This article was written by Solomon Oladipupo at www.financemagnates.com.
