The Cyprus Securities and Exchange Commission (CySEC) has announced a second fine today, once again relating to the binary options industry. The parent company of 24option, GrandOption, 24FX and QuickOption has been fined by the Cypriot financial regulator €156,000. The announcement comes merely minutes after CySEC settled with Banc De Binary for €350,000.
The fines comes on the back of multiple violations starting with €10,000 for non-compliance with Section 28(1) of the Cyprus Investment Firms law, which relates to failure of the company to keep adequate and organized records for assessing the suitability of its clients and advertising material. In addition the company has failed to keep adequate records of client complaints and the measures taken to resolve those.
“No Reasonable Measures”
Another €20,000 of the fine are for non-compliance because the company did not take reasonable measures to avoid any unjustified aggravation of the operational risk in the outsourcing of activities or business operations to third parties.
Misleading advertising and failure to adhere to the interests of clients when providing bonus promotions cost the company another €60,000.
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CySEC has added €15,000 more to the fine for the company failing to inform its potential clients about the nature of inherent risks associated with trading binary options, while another €40,000 were added for the failure of the Rodeler Ltd to assess the eligibility of its clients to engage in investment activities.
The final count on which the parent company of 24option has been fined by CySEC is the lack of ability of the company’s systems and procedures to adequately identify clients. On this note, the regulator added another €10,000 for non-compliance, with another €1,000 added for lack of compliance controls.
CySEC states in its announcement that in issuing the fine, it has taken into consideration that the company has adopted a set of corrective measures and actions. Rodeler Ltd has installed a new customer system, which, amongst other things, records the results of the evaluation of suitability and implemented effective and transparent procedures regarding the examination of complaints and it keeps an electronic record of complaints.
Symmetrical Bonus Structure
The firm has also upgraded its operation manual in order to include more detailed and clear procedures as these are followed in practice, and started reviewing all of its advertising material for compliance with the law.
The company has also adopted a symmetrical bonus structure and it has amended the terms and conditions for granting bonuses and updated the content of its websites to include the necessary risk warnings on the banners that it has been posting.
The brands of Rodeler Ltd have also fully upgraded their procedures for opening client accounts in order to comply with CySEC’s recommendations.