OptionBit Parent Company Novox Capital Fined by CySEC

According to the regulator, the broker failed to adhere to the law on multiple counts.

The Cyprus Securities and Exchange Commission (CySEC) published a communique announcing a new administrative fine that the regulator has imposed on the parent company of binary options broker OptionBit.

Novox Capital has to pay a €175,000 fine, with CySEC citing multiple violations that caused it to initiate the administrative action. The biggest count on which the brokerage was fined amounted to €70,000 for providing investment advice and portfolio management services without having the appropriate authorization.

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OptionBit’s parent company was also fined €10,000 for failing to keep the entire service life of the requirement for authorization. According to CySEC, the firm did not implement adequate policies and procedures in order to ensure that it was compliant with the financial services law in Cyprus.

The statement issued by the regulator outlines that the brokerage did not maintain adequate internal control mechanisms for the approval of its promo material and did not maintain adequate business operation records.

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The firm was also fined €20,000 for failing to prevent operational risk from outsourcing its activities. CySEC’s communique highlights that the firm “did not to act with due skill, care and diligence in the management of outsourcing customer service to third parties.”

Novox Capital did not effectively supervise the call centers and did not take immediate action to rectify inappropriate customer service and sales. The company also failed to establish methods of assessing the performance of its service providers.

The company did not provide additional comment on the matter. Last month, Finance Magnates exclusively reported on the steps taken by the company to reduce its workforce.

“Not Fair, Not Clear, and Misleading”

According to CySEC, Novox Capital also failed to act fairly and in the best interest of its clients. On this count the firm has been slapped with another €30,000. The information that was provided by customer service call centers that provided services to OptionBit were “not fair, not clear and misleading.”

Another €15,000 has been added to the company’s fine because of its failure to adequately warn its clients about the risks associated with its products.

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