Largest fine of 2015

CySEC Fines Safecap (Markets.com) €168,000 for Regulatory Violations

Safecap Investments was the target of a €168,000 fine from CySEC, the largest such penalty applied by the financial regulator

Following the issuance of fines by Cypriot financial regulator, CySEC, of several brokers for amounts of €20,000 and lower, there has been some industry skepticism  as to whether the small size of these penalties does much to limit further infractions by brokers. Raising the bar, CySEC has announced that they have applied a larger fine to Safecap Investments for €168,000.

The broker behind the Markets.com brand, Safecap Investments, was in violation of Directive DI144-2007-01 of 2012 and Directive DI144-2007-02 of 2012 that govern rules for the Authorization and Operating Conditions of CIFs and Professional Competence of Investment Firms and of the Natural Persons Employed by Them. The penalty occurs as Safecap is in the midst of being involved with several mergers and acquisitions. Its holding company, TradeFX, was recently purchased by Playtech.  In addition, it was announced yesterday that AvaTrade is being acquired by Playtech and will have its operations merged with that of TradeFX.

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According to CySEC, the violations were found during onsite inspections that were carried out in May 2013 and October 2014 at the firm’s offices. In announcing the penalty today, CySEC refrained from providing specifics of the exact violations. After a series of smaller fines were given to UFX and SkyFX during May, the current penalty is the largest announced by CySEC this year, a title previously held by Banc de Binary which was reported to have received a €125,000 fine in February.

To learn more about the violations, Finance Magnates reached out to Safecap representatives. A representative explained that the penalties were from older issues that have been fixed, as they stated that “the fine announced today by CySec relates to historic findings which were remedied. Given the size and nature of the fine and the fact it related to aggregation of audits from historic periods that have been remedied, we do not consider this to have an impact on the operational or financial performance of Safecap”.

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