The Financial and Capital Market Commission (FCMC) and investment firm AS, Renesource Capital, have reached an administrative agreement, which stipulates a series of fines and legal obligations. According to the announcement, a fine of EUR 34,000 has been imposed on Renesource Capital for infringements of the Financial Instruments Market Law (FIML), and an additional penalty for the same amount for infringing the Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing (AML law).
Furthermore, the FCMC imposed Mārtiņš Priede, the investment firm’s Chairman of the Board, a fine of EUR 2,900 per the administrative agreement reached.
“During the inspections, the FCMC identified a number of violations of regulatory requirements in the activities of Renesource Capital, such as applying covert commissions, providing incomplete and untimely information on expenses and costs before and after a transaction, failure to timely notify a customer of planned costs and expenses before the provision of investment services or ancillary services, as well as shortcomings in internal governance,” the commission said.
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Guidelines Provided to the Firm
Also, the AML law was breached according to the inquiries made, as the FCMC claimed that Renesource Capital’s AML/CTPF internal control system was not effective enough. About the Chairman’s role, the commission noted: “As part of the inspection, the FCMC concluded that Mārtiņš Priede, Chairman of the Board of Renesource Capital, as the responsible person for monitoring the AML/CTPF field, did not ensure that Renesource Capital took appropriate measures to guarantee effective functioning of AML/CTPF internal control system and independence of risk management functions, thereby exposing Renesource Capital to the money laundering and reputational risks.”
Furthermore, the FCMC provided further guidelines to the investment firm to comply with the specified time limits. Moreover, the commission urged Renesource Capital to enhance its internal control system to prevent future sanctions for violating the Financial Instruments Market Law.