The Cypriot regulator, CySEC ended a rather busy year by announcing on 30th December its decision to impose an administrative fine of EUR 5,000 on iForex Ltd (Cyprus) Ltd, one of the brokers holding a Cyprus Investment Firm (CIF) license.
What we can deduce from this decision by the Cyprus Securities and Exchange Commission is that the regulator is really striving to change gears and step up its operations, in an attempt to safeguard Cyprus’ status as an attractive financial center, especially in the aftermath of the Cyprus financial crisis in March 2013 and the bail-in of deposits at the island’s main banks. The boom in licensing forex and binary options firms has meant an increase in workload for CySEC, which at first appeared to be struggling to come to terms with its new obligations. However, lately, it shows clear signs of becoming more efficient as a regulator, and we can observe an improvement in its oversight and supervisory and surveillance monitoring of the companies it has licensed. As CySEC places its member firms and more specifically their online content under greater scrutiny, such administrative fines may become a usual thing.
According to the CySEC announcement, the administrative council of the regulator at a meeting on 11 November 2013 and following a review of the broker’s website iforex.gr, which took place on May 24th and May 28th 2013, decided to impose the fine on iForex for not fully complying with the conditions of paragraph 6 (2) of Directive DI144 - 2007- 02 and with provisions of the 2007 Law which provides for the Provision of Investment Services, the Exercise of Investment Activities, the Operation of Regulated Markets and other Related Matters. More specifically, the fine was imposed in relation to unbalanced online banner advertising, which was noticeably missing certain required risk disclosures.
The small fine is attributed to the fact that the breaches have since been rectified as iForex aims to better comply with its regulatory obligations as a CIF.
According to CySEC, iForex has removed the content considered to be unbalanced from its pages, and added under each advertising banner in question a short risk notice stating: «Trading Forex and /or CFDs and /or Binary Options carry a high degree of risk and may not be suitable for all investors » online ‘ read more ‘ (redirecting to a link that refers to a detailed description of the risks of transactions in Forex / CFDs).
The move of iForex to swiftly comply reflects the professionalism of the firm and its effort to safeguard its CIF status, since the group was recorded significant growth, with considerable success in Europe, which is attributed to and spearheaded by its Cyprus office.
Moreover, we can conclude that CySEC’s proven determination to tighten controls all around, reflect the importance attributed by the regulator to the protection of the rights of the investing public in general and the clients of its regulated CIFs in particular.