The Israeli branch of retail broker AvaTrade was issued with a 500,000 shekel ($141,000) fine this Wednesday for breaching local regulations.
According to a statement released by the Israeli Securities Authority (ISA), the fine pertains to regulatory infringements that took place from late 2016 through to the end of the first quarter of 2017.
The Israeli regulator said that AvaTrade’s Israeli subsidiary, which operates under the brand name Atrade, gave services to clients that it was not licensed to provide.
“[Atrade] allowed some of its customers to make new transactions in financial instruments that were prohibited for trade by the [ISA], contrary to the terms of the license granted to it,” said the regulator.
“In doing so, the firm broke the ISA’s trading venue management rules, by not having a license, or by breaching license terms.”
ATFX Thanks NHS Frontline Workers with 1k Fruit Boxes DonationGo to article >>
Another conditional fine
AvaTrade admitted to having committed the breach in regulations. Alongside the 500,000 shekels that the broker will have to pay, the ISA also imposed a conditional fine – also worth 500,000 shekels – on AvaTrade.
The conditional part means that, if the broker breaches similar regulations in the next two years, it will have to pay another half-a-million shekels to the ISA.
Atrade will also have to adopt an internal compliance strategy to ensure that it does not infringe upon regulatory requirements again in the future. To make sure that happens, the broker is required to bring in an external auditor who will confirm that such a strategy has been put in place.
This is the second time this year that AvaTrade’s Israeli subsidiary has been fined by the ISA.
In January of this year, the regulator issued the broker with a 576,000 shekel ($163,000) fine. The ISA did not say explicitly what AvaTrade had done, though it appeared to be related to the custodial services the broker provides to its clients.