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Screenshot of a breaking news alert e-mail from Q2 2017
The Board of the Cyprus Securities and Exchange Commission (CySEC) has informed that it has decided to impose a total administrative fine of €105,000 to the CIF HF Markets (Europe) Ltd.
HF Markets (Europe) Ltd runs the retail forex broker HotForex (hotforex.com) and binary options firm OptionTrade (optiontrade.com) businesses.
The full breakdown of the fine is linked to below. However the largest portion of the fine was due to information provided to the company’s clients being not fair, clear and non-misleading. In particular, CySEC noted that the company’s employees downgraded the risk of loses in trading the products offered by the company.
The fines were for noncompliance with the following legislation:
- the Directive DI 144-2007-01 of 2012 of the Securities and Exchange Commission for the Authorisation and Operating Conditions of CIFs,
- 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.
In reaching its decision, the CySEC has taken into consideration the following:
- the amount of administrative sanctions provided in the relevant legislation,
- the importance attributed to the need to ensure that the persons subject to the supervision of the CySEC fully comply with the provisions of the Laws and the relevant Directives,
- the seriousness attributed to the CIF’s obligation to act fairly, honestly and professionally in accordance to the best interests of their clients,
- The importance attributed to the exercise of efficient supervision of the externally outsourced provider, such as not to prejudice the quality of control of the CIF and the interests of the clients,
- The importance attributed to the protection of CIF clients’ interests,
- the adoption of correctives measures/actions on behalf of the Company such as, inter alia, the following:
-the Company has proceeded in terminating its business relationship with the Provider,
-the Company has proceeded in reviewing its existing agreements (introducing brokers agreements with Service Providers), so that the type of services that Service Providers (introducing broker/affiliate) may offer have been clarified, and specifically that the Service Providers’ employees may not offer investment advice the Company’s clients.
-the Company has not committed a similar violation in the past.
To view the full report, click here.