The Cyprus Securities and Exchange Commission (CySEC) has just announced that it has fined the FX and CFDs broker PriorFX Ltd €64,000 ($67,780) for violating the Investment Services and Activities and Regulated Markets Law, according to a regulatory announcement.
PriorFX is regulated by CySEC, license 221/13, and therefore has to comply with Cypriot regulations in order to maintain its CIF trading license and offer its services across Europe, the watchdog stated.
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Although it didn’t provide a breakdown or further details for the regulatory fines, CySEC’s action reflects the violations of several articles of the Investment Services and Activities and Regulated Markets Law.
More specifically, the Cypriot financial regulator issued the fine for non-compliance with Section 28(1) of the law. This often means that the CIF firm failed to establish adequate policies and procedures to ensure the compliance of its marketing material with the regulatory obligations. It also may include the failure to maintain an internal operation manual or orderly records of the information related to the assessment of its marketing materials.
The second fine was imposed based on the company’s violation of Sections 36(1)(c) and 36(1)(d) of the law and paragraphs 14(1), 15 and 16(1) of Directive DI 144-2007-02 of 2012. This often stands for violations committed by the company’s employees such as not maintaining records of the conversations between them and the broker’s clients. Moreover, it could mean the information provided to the clients by its employees was misleading, such as in cases where they downgrade the risk of losses in trading the products offered by the company.