On Wednesday, the Cypriot financial market regulator, CySEC, published the content of a decision made in early March regarding the company Otkritie Broker Ltd, which offers brokerage services through the website Open-Broker.com.
According to the regulator's statement, the licensed entity is under too much influence from one of its indirect shareholders, Otkritie FC Bank, one of the largest commercial banks in Russia in terms of owned assets.
CySEC Made Two Decisions regarding Otkritie Broker
Otkritie Broker Ltd has the status of a Cyprus Investment Firm (CIF) and has been authorized under license number 294/16 since 2016. The company provides investment advisory, brokerage, and asset management services. Although it is registered in Cyprus, it is linked to a Russian bank, which, in light of the current war in Ukraine, has sparked some controversy.
CySEC decided to suspend the voting rights attached to the shares of the CIF, which are held by Otkritie Broker JSC (being the sole direct shareholder of the CIF and a 100% subsidiary of Otkritie FC Bank) and constituting the total share capital of the CIF. In addition, the regulator has banned Igor Gutinskiy, who serves as the sole Director of Otkritie Broker, from exercising management duties to the company's Board of Directors for two years.
The above will take effect six months after the decision around September 2023. In addition to the CySEC decision available only in Greek, the regulator stated that by suspending the voting rights of Otkritie Broker JSC, which is part of Otkritie FC Bank, it would ensure that individuals linked to the Russian institutional will not be able to influence decisions made during the general meeting of shareholders.
On top of that, Otkritie operated another company in Cyprus called Otkritie Capital Cyprus. However, its license was withdrawn in 2021 after the institution decided to end its retail brokerage business in Cyprus a year earlier.
CySEC Imposed €2.9 million Fines in 2022
Last month, CySEC provided a summary of the previous year, announcing that it had supervised 837 regulated entities by the end of 2022. Furthermore, the regulator disclosed that it would now oversee crowdfunding providers and personal pension products as part of its expanded supervisory authority.
According to the CySEC annual summary published on March 15, 2023, the Cypriot regulator is currently monitoring 837 companies, representing an increase of 3.9% compared to the 806 companies at the end of 2021. Additionally, around 100 new applicants are awaiting licensing approval, which is an increase of 12% compared to 2019, before the Covid-19 pandemic.
Meanwhile, the Cypriot regulator has revoked the Investor Compensation Fund (ICF) membership of three former CIFs, including Inveza Capital Ltd, F1Markets Ltd, and FF Simple and Smart Trades Investment Services Ltd. Moreover, CySEC has expanded its warning list of unregulated entities targeting investors in the country, this time blacklisting six online trading websites.
