The Cyprus Securities and Exchange Commission (CySEC) announced that it has fined X Global Markets Ltd €50,000 due to shortcomings in the company’s anti-money laundering controls.
Accurate details of the settlement have not yet been made public, but the violations were related to the general principals of the Money Laundering and Terrorist Financing Law (L. 188(Ι)/2007). The enforcement action was a result of the compliance onsite investigation started by the regulator between April 2016 to July 2017.
In deciding the disciplinary action, the authority considered it needed to send a clear deterrent message about the AML lapses and highlight weaknesses in supervision systems covering the staff’s handling of trading accounts.
The deficiencies, cited in the regulator’s order against X Global Markets, included not complying with rules of new customer due diligence and continuous monitoring of business relationships. Overall, the statement describes a lacklustre anti-money laundering program that may have allowed risky clients/trades to go unreported.
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Formerly Known as FXRidge Ltd
A Cypriot based company founded in 2012, X Global Markets Ltd is operating under two brands, XGLOBAL Markets and XGLOBAL Investments. The latter is the investment management arm of X Global. Additionally, the company operates XGLOBAL FX Ltd, which is regulated by VFSC (Vanuatu Financial Services Commission), and holds a Dealer in Securities license.
The company was originally licensed by CySEC under the brand name FXRidge Ltd, as a Forex broker, and also holds a CIF licence.
After several months of pause, the Cypriot regulator is once again flexing its muscles and actively finding compliance irregularities. Moreover, Cysec has suspended several forex brokers that were caught up in promoting their risky products in the UK.
Following such settlements, CySEC often orders the company to take corrective measures within a set framework. However, the regulator confirmed that X Global Markets Ltd already paid the settlement fees and since such agreements are usually announced within six months of an inspection, the majority of issues should have already been resolved. Furthermore, it noted that all amounts payable from settlement agreements are considered revenue of the Treasury Department and do not go to CySEC’s pocket.