The Cypriot financial industry watchdog, the Cyprus Securities and Exchange Commission (CySEC) has announced that UFX was fined €8,000 due to three cases of compliance failure.
In the first case outlined by CySEC, the firm will have to pay €3,000 for failing to obtain the necessary information about its clients to determine their suitability to invest in a given product. According to the regulations, clients need to verify their experience, knowledge, financial situation and investment objectives before being able to begin trading the proposed instruments.
While this procedure is rather technical in its nature, since every client fills in a questionnaire before opening a real money account, apparently the step was missing from the UFX new account sign-up process.
Another €3,000 has been imposed due to a similar violation where clients of the brokerage should have been asked about their experience and knowledge related to the trading product.
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The final €2,000 is part of a region specific violation. The company did not have a legal person appointed to provide investment services in Romania, and was not registered in the public register of Romania while accepting clients from the region.
UFX has not been under the radar of the Cypriot watchdog in the past, which was cited by CySEC as a mitigating factor alongside the quick action which the broker undertook to comply with the regulations.
In addition, UFX has resolved customer complaints.
The broker’s Managing Director Dennis De Jong, commented on the announcement, “As a Cyprus based regulated broker with an exceptional track-record working with CySEC, we very much appreciate the commission’s decisions in regards to our compliance status. The fine, while small, helps us become a better broker for our traders. As part of our continuous effort to be the best possible broker for our traders, in addition to complying with CySEC’s regulation, we have just integrated Zendesk into our own customer relations system to better handle client related issues.”