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Screenshot of a breaking news alert e-mail from Q2 2017
LeapRate has learned that Anyoption has become the latest regulated broker in Cyprus to receive a regulatory fine, as part of a major sweep by CySEC of all leading CIF-licensed brokers on the island.
In terms of size, Anyoption’s fine (formally handed out to Anyoption’s regulated parent company Ouroboros Derivatives Trading Ltd) is middle-of-the-road as compared to several larger €300,000+ fines handed out to Banc de Binary, EZTrader, InteractiveOption and IronFX, and smaller yet substantial fines received by firms including 24option (€156,000), UFX.com (€123,000), and CommexFX (€150,000).
We expect that there are more CySEC fines to come as the regulator continues its reviews of other brokers.
The corrective measures agreed to by Anyoption as part of its censure by CySEC include, interestingly, the agreement that it move all its call center activity to Cyprus. Anyoption currently carries out much of its call center activity in Israel, which we understand will now be shuttered.
The reasons CySEC gave for the fine were, as with most of the previously mentioned companies, fairly vague and general in nature – issues regarding providing investment advice, supervision of activities, terms of bonuses granted to clients.
Anyoption is one of just a handful of binary options brokers whose operations are indeed licensed by a recognized governmental regulator. Most binary options brokers, subject to a lot of negative press lately, operate as offshore unregulated entities.
Anyoption’s fine total of €235,000 was broken by CySEC as follows:
€70.000 for non-compliance with Section 6(8) of L.144(Ι)/2007 as it provided the investment service of investment advice, which is not stated in its authorisaton.
€10.000 for non-compliance with Section 28(1) of L.144(Ι)/2007 as it failed to comply at all times with the authorization and operating conditions, as laid down in Section12(4) of L.144(I)/2007, which states that “all members of the board of directors shall commit sufficient time to perform their functions in the CIF”, since the Company’s executive director did not commit sufficient time to perform his duties and did not adequately supervise the Company’s services/activities.
€10.000 for non-compliance with Section 28(1) of L.144(Ι)/2007 as it failed to comply at all times with the authorization and operating conditions, as laid down in Section 18(2)(a) of L.144(Ι)/2007 and paragraph 4(1)(f), 13 and 14 of Directive 1. More specifically:
- The Company did not maintain adequate and orderly records of its marketing communications;
- The Company did not implement and maintain effective and transparent procedures for the reasonable and prompt handling of complaints or grievances received from 2 clients.
- The Company did not keep an up-dated/complete internal operations manual.
€20.000 for non-compliance with Section 28(1) of L.144(Ι)/2007 as it failed to comply at all times with the authorization and operating conditions, as laid down in Section 18(2)(d) of L.144(Ι)/2007 and paragraph 16(3) of Directive 1, since, during the outsourcing of its marketing and sales service, it did not take reasonable measures to avoid any unjustified aggravation of the operational risk and not to impair the CySEC’s ability to supervise the Company’s compliance.
€40.000 for non-compliance with Section 36(1) of L.144(Ι)/2007 as it failed to act fairly, honestly and professionally in accordance with the best interests of its clients in relation to the terms and conditions for the granting of benefits (trading bonus) and the practices applied in this respect.
€30.000 for non-compliance with Section 36(1)(a) of L.144(Ι)/2007 and paragraph 6, subparagraphs (2) and (8) of Directive 2, as the information the Company provided to its clients, amongst others, through its website and the information contained in the advertising material of the Company, were not fair, clear and non-misleading in accordance with Section 36(1)(a) of L.144(Ι)/2007 and the Company did not ensure that these satisfy the terms of paragraph 6, subparagraphs (2) and (8) of Directive 2.
€15.000 for non-compliance with Section 36(1)(b) of L.144(Ι)/2007 as the information provided to clients/potential clients on its website at the relevant time, upon entering into the business relationship, were not appropriate so that the clients are reasonably able to understand the nature and risks of the investment service offered and the specific type and the proposed financial instrument, and in accordance with Section 36(1)(b) of L.144(I)/2007 and paragraphs 8-12 of Directive 2.
€40.000 for non-compliance with Section 36(1)(d) of L.144(Ι)/2007 and paragraphs 15 and 16 of Directive 2 as, it failed to ask clients to provide the necessary information regarding their knowledge and experience, to assess whether the investment service or financial instrument envisaged is appropriate for them.
For more details on the Anyoption fine click here.