The board of the Cyprus Securities and Exchange Commission (CySEC) has fined HF Markets, the parent company of HotForex. It was fined in January 2016 for multiple violations of the securities laws in the country. The fine totaled €105,000 with a detailed breakdown of the different violations officially published by the regulator.
According to CySEC’s announcement, HotForex failed to comply with legal obligations that require it to adequately maintain records of business operations. The firm had been outsourcing some of its activities to third parties and could not provide the regulator with an official agreement of the service provider to which it was outsourcing its customer services.
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In addition the company had not been maintaining records of the phone conversations between its customer service reps and clients. Due to this, CySEC has not been able to ascertain whether the firm had been complying with regulations when communicating with clients.
Another €20,000 was added to the fine because HotForex was not “acting fairly, honestly and professionally in accordance with the best interests of its clients”. This count is related to the practices of the employees of the company and the terms and conditions which the firm presented to its customers.
A further €30,000 fine was added to the total for unfair, unclear and misleading marketing information. Due to the lack of appropriate risk disclosure the firm’s bill with CySEC has increased another €15,000.
The final €20,000 of the fine is attributed to lack of maintenance of an adequate record of client agreement documents.