Cypriot division of Kiev-based institutional and retail brokerage firm found to have not maintained correct anti-money laundering procedure
Cypriot regulatory authority CySec has today imposed a €12,000 total administrative fine on the Cyprus division of institutional and retail multi-asset brokerage firm Dragon Capital.
The company, whose head office is in Kiev, Ukraine, has operations in Cyprus, in relation to which CySec has today announced that in accordance with its findings, the company has not acted in keeping with CySec’s directive DI144-2007-08 which relates to the required procedure to prevent money laundering as well as the financing of terrorism.
The fiscal penalty is made up of several components, including an amount of €9,000 for infringement of Article 58 ( a) of the Law, as the systems and procedures applied in relation to the determination identity and the exercise of due diligence the client were found not adequate and appropriate by CySec, in accordance with Articles 61 and 65 of the Law.
Specifically, the administrative fine takes into account infringement of the following matters:
€1,000 penalty for non- compliance with a separate form on which to record all data and information that make up the economic profile of customers of the company.
€3,000 for failure to collect all the necessary data and information that represents the economic profile of a series of customers of the company.
€2,000 for non-exercise of continuous supervision over the business relationship of a number of customers of the company.
€3,000 penalty for the company’s failure to verify the identity of its customer base company and / or beneficial owners and / or authorized representatives , as well as having failed to collect the correct documents and client information in the required form as well as an update of documents and data files relating to clients of the company.
In issuing this notice, it remains that CySec continues to refrain from the practice of imposing very high fines on market participants in its jurisdiction, which serves to facilitate ease of business for the many FX companies on the island, however with customer protection becoming a high priority among regulatory authorities worldwide, it is a moot point as to whether these figures will rise or not subsequent to the implementation of MiFID II and the standardisation of worldwide regulatory legislature with relation to electronic trading.