French authorities impose EUR 200,000 fine on FXCM for not verifying partners’ authorization


The Sanctions Commission of AMF – France’s financial markets regulator, today published its decision on sanctions against FXCM Ltd, a subsidiary of US retail Forex giant FXCM Inc (NYSE:FXCM).

The company is being sanctioned over violations of French regulations dating back to 2013, when the AMF decided to check whether the broker was meeting its professional obligations. The check resulted in a regulatory report published in April 2014, focusing on matters related to FXCM and its partners in France.

The regulatory report found that FXCM had failed to check the authorization status of three companies that had brought clients to the broker. This requirement concerns checking whether the partner companies have the necessary licenses to offer portfolio management services to third parties, as well as checking the skills and competences of these partner companies, and the content of the services they propose on behalf of the broker.

amfThe three partner companies in question brought a total of 113 clients to FXCM. According to the report, FXCM “increased its earnings” by EUR 393 447.84 as a result of the activities of these clients.

In a hearing on the matter, FXCM gave explanations regarding the “earnings”. The company has also ceased any business ties with the three partners in question. Furthermore, it has implemented enhanced internal control mechanisms of checking introducing brokers and partner companies.

Taking all relevant facts into account, the Sanctions Commission has decided to impose a EUR 200,000 ($220,768) penalty on FXCM. This is way below the sum of EUR 1 million suggested in earlier media reports.

To view the official statement (in French) from the AMF, click here.

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French authorities impose EUR 200,000 fine on FXCM for not verifying partners' authorization

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