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Cypriot financial markets regulator CySec has today announced that it has imposed an administrative penalty of €14,000 on DFG Capital, a firm which provides a range of investment products to clients, one of which is spot FX.
In this particular circumstance, the fine was applied due to breaches of the Prevention and Suppression of Money Income of Money Laundering Act of 2007 , as in force ( ‘ the Act ‘ ) and Directive DI144 – 2007-08 2012 SEC for the Prevention Money Laundering and Terrorist Financing (‘the Directive ‘ ) .
The administrative fine comprises of the following:
An amount of €11,000 for violation of section 58 ( a) of the Law, relating to systems and procedures applied in relation to customer identity and the requirement to exercise due diligence toward customers having not been adequate, in accordance with Articles 61 , 64 and 65 of the Act and sections 7 , 9, 12, 14 , 18, 21, 22, 24 , 26, 33 and the fourth and fifth annex.
A further €1,000 represented a breach of paragraph 9 (1 ) , subparagraphs ( d ) , ( j ) and ( k) of the directive, which refers to the monitoring and evaluatation of the proper application of manual procedures and risk management, as well as due to CySec’s findings that the company did not keep correct lists of the categories of customers under calculated risk, and did not implement appropriate measures for identifying, recording and evaluation of risks arising from the Company’s existing customers .
Lastly, €2,000 was applied for breach of paragraph 5 ( d ) of the Directive as a result of evidence that it was found that teh firm had not set in place suitably effective and efficient systems and procedures to achieve compliance.
This amounts to a total of €14,000 which again demonstrates CySec’s reluctance to impose the extremely punitive measures often associated with other Western regulatory authorities.