Cyprus-based investment firm Colmex Pro has reached a €200,000 settlement with the Cyprus Securities and Exchange Commission (CySEC) over possible regulatory violations spanning a two-year period, the regulator announced today (Tuesday).
NicosVassiliou, the CEO of Colmex Pro told Finance Magnates that the agreement "does not constitute an admission of any wrongdoing" and relates to "a historical compliance review" covering a past period.
Colmex Pro Settles With CySEC for €200,000
According to the regulatory announcement, the investigation covered Colmex Pro's activities between January 17, 2021, and February 24, 2023. The regulator identified potential violations across multiple areas, including CIF authorization requirements, organizational standards, conflict of interest management, and client information disclosures.
CySEC also flagged possible breaches related to appropriateness assessments for clients, best execution obligations, and product intervention requirements specific to contracts for difference (CFDs) marketed to retail clients. It is worth noting that the regulatory accusations pertain only to the Cypriot branch, while the broker also has entities in other jurisdictions, including Israel and South Africa.
"In line with our commitment to transparency and ongoing regulatory cooperation, the Company has reached a mutually agreed settlement with CySEC," Vassiliou commented.
"We have already implemented all required enhancements to our compliance framework and remain dedicated to maintaining the highest standards of conduct and client protection," he added. "The matter pertains to a past period and forms part of our broader efforts to ensure our internal controls and procedures remain robust and aligned with evolving regulatory standards."
The settlement amount has been paid in full, with CySEC noting that all settlement funds are directed to the Treasury of the Republic of Cyprus rather than becoming income for the regulator itself.
The settlement addresses potential breaches of the Investment Services and Activities and Regulated Markets Law of 2017 and European Union Regulation No. 600/2014, following a supervisory review conducted by CySEC.
CEO's Background with CySEC and Previous Settlements
Vassiliou joined Colmex as CEO relatively recently, taking the helm of the CySEC-licensed broker in late 2024. Notably, he spent four years from 2016 to 2020 working for the regulator as an Officer in the Market Surveillance and Investigation department. His familiarity with Cyprus's regulatory structures and personnel likely facilitated reaching a mutually satisfactory agreement.
This isn't Colmex's first settlement with CySEC. In 2019, Finance Magnates reported that the broker reached a similar €50,000 settlement for potential violations. This was linked to an earlier penalty imposed on the broker in 2016, also by the Cypriot regulator.
The 2016 fine amounted to €100,000 and addressed issues such as inadequate policies and procedures for evaluating customer compatibility, knowledge, and experience, as well as failure to mitigate unnecessary operational risks. The regulator also found that information on the broker's website, online customer service, and advertising was not fair, clear, or transparent.
According to the current CEO, this latest settlement concludes a multi-year regulatory process between Colmex and CySEC.
