The Cypriot financial market regulator has today (Monday) announced a €150,000 settlement with L.F. Investment, the operator of the contracts for differences (CFDs) broker Purple Trading, for “possible violations” of several regulatory requirements. The company has already paid the settlement amount.
CySEC’s Assessment of the Broker
The Cyprus Securities and Exchange Commission (CySEC) notice detailed that the settlement was reached after the regulator assessed the broker’s compliance from July 2021 until the start of October 2023.
More from Cyprus: CySEC Withdraws Itrade Global's Licence 2 Years After It Shut Down CFDs Broker
According to the regulator, there were possible lapses around the company’s organisational requirements under the CySEC licence. Furthermore, there was a possibility of a conflict of interest between the broker and its clients. The broker also possibly failed regarding the general principles and information addressed to clients.
Another possible lapse was around the broker’s obligations regarding the appointment of tied agents. There were also questions over the broker’s compliance with restrictions on the marketing, distribution, and sale of CFDs to retail clients.
“This matter actually stems from a historical compliance review and does not involve any admission of wrongdoing. We view the resolution as part of the continued efforts to stay aligned with regulatory expectations and the team maintains open, constructive dialogue with CySEC,” Adam Dulovec, Purple Trading's Executive Director and CEO, told FinanceMagnates.com.
“Purple Trading already made all the necessary enhancements to their internal procedures and remains fully committed to ensuring strong client protection, high standards of conduct and fair trading environment, as it always did. Strengthening the compliance framework is therefore an ongoing priority for all of our companies,” he added.
Only European Clients
The Purple Trading brand operates in Europe under a Cyprus licence. Its website mentions that the Cypriot entity “cannot and will not accept clients from outside the European Economic Area and from Belgium, Switzerland, and the USA.”
However, the broker brand also operates outside Europe under an entity licensed in Seychelles. The Seychelles entity even backs a prop trading brand, Fintokei, which is based in the Czech Republic. Interestingly, Fintokei started by offering prop trading services in Japan and then began to capture other markets.
