The Cyprus Securities and Exchange Commission (CySEC) has just announced that it has reached a settlement with Lionsman Capital Markets (Cyprus) Ltd, fining the firm €90,000 for violating the Investment Services and Activities and Regulated Markets Law.
Cyprus Investment Firm (CIF) Lionsman is regulated by CySEC and therefore has to comply with Cypriot regulations in order to maintain its CIF trading license, which enables the broker to offer its services across Europe, the watchdog stated.
The CySEC fine reflects the violations of several articles of the Investment Services and Activities and Regulated Markets Law.
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More specifically, the fine is for non-compliance with Section 28(1) of the law, which often refers to a CIF’s failure to establish adequate policies and procedures to ensure the compliance of its marketing material with regulatory obligations. This may include the failure to maintain an internal operation manual or orderly records of the information related to the assessment of its marketing materials.
CySEC has further explained that the fiscal penalty was also imposed for non-compliance with Article 36(1), (a), (b) and (d) of the law, relating to conduct of business obligations when providing investment and ancillary services to clients. The violation of this section often arises when the information provided on the broker’s website was not appropriate or sufficient to allow clients to reasonably understand the nature and risks of the investment service that the company offers.
CySEC ordered the company to take corrective measures within a set framework, otherwise additional measures will be taken such as the imposition of new fines, or suspension and/or even the withdrawal of their licenses.
However, it is important to note that fines are usually issued within 6 months of an inspection, so at the point of the fine, the majority of issues should have already been resolved.