CySEC Suspends CIF License of Investment Firm Depaho

The watchdog gave the company two weeks to take necessary actions to comply with a series of provisions.

The Cyprus Securities and Exchange Commission (CySEC) announced on Friday that it has suspended “in whole” its CIF license number 161/11 of the investment firm, Depaho Ltd. According to the resolution published on the watchdog’s website, the decision was taken under suspicion of alleged violations in almost 12 articles.

CySEC says the investment firm violated article 5(1) of the Investment Services and Activities and Regulated Markets Law of 2017, as the company allegedly offers investment services of advisory as a regular occupation “without the granting of prior authorization” by the financial supervisor.

Furthermore, the Cypriot watchdog pointed out that Depaho Ltd allegedly violated the following articles: “Article 22(1) of the Law as the Company does not appear to comply at all times with the conditions for authorization established in articles 17(2) and (6) of the Law, regarding the organizational requirements; Article 24(1) of the Law as the Company does not appear to take all reasonable steps to identify and to prevent or manage conflicts of interest between itself, including its managers, employees and tied agents, or any person directly or indirectly linked to it by control, and its clients; Article 25(1) of the Law as the Company does not appear to act honestly, fairly and professionally when providing investment services to clients, in accordance with the best interests of its clients.”

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Deadline to Comply with the Legal Requirements

Also, CySEC claims the firm seems to lack understanding of the financial instruments it offers or recommends, allegedly violating article 25 (2)(b). In fact, the watchdog added that Depapho Ltd does not seem to provide clear, fair and not misleading information via marketing campaigns.

“The above decision was reached taking into consideration, among others, that the Company does not appear to have provided adequate information regarding the corrective measures taken and/or has not taken adequate corrective measures for the purposes of the settlement reached with CySEC (announcement dated 29 September 2020), as well as the results of the investigation performed by the supervisory authority of Spain Comision Nacional del Mercado de Valores (‘CNMV’), the Company’s branch in Spain, regarding the Company’s operation in that market, as the aforementioned alleged violations cause concern and risk relating to the protection of the Company’s clients and/or constitute a threat to the orderly operation and integrity of the market,” CySEC said.

The Cypriot watchdog set a deadline of two weeks for the investment firm to take the proper actions to comply with the legal requirements.

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