Cypriot regulator fines stockbroker Atlantic Securities for supervision lapses
The Cyprus Securities and Exchange Commission (CySEC) announced that it has fined stocks broker Atlantic Securities Ltd €3,000 due to shortcomings in the company’s internal controls.
Established in Limassol in 2001, Atlantic Securities is a member of the Cyprus stock Exchange since 2001 and member of Athens Exchanges since 2006.
Accurate details of the settlement have not yet been made public, but the violations were related to the general principals of the article 16(2) of Regulation (EU) 596/2014 on market abuse. The enforcement action was a result of the compliance onsite investigation started by the regulator, which found that the broker did not establish or maintain effective arrangements for detecting suspicious orders and transactions.
Additionally, Atlantic Securities’ systems didn’t take into account the non-exhaustive list of market manipulation indicators contained in the Cypriot law.
In deciding the disciplinary action, the authority considered it needed to send a clear deterrent message about the CIF’s lapses and highlight weaknesses in supervision systems covering the staff’s handling of trading accounts.
After several months of pause, the Cypriot regulator is once again flexing its muscles and actively finding compliance irregularities. Earlier in September, the Cyprus watchdog had taken away the license of London Capital Group (Cyprus) as the company materially contravened its licensing conditions. The CySEC confirmed it will maintain supervision over the Cypriot arm of London Capital Group (LCG) until it has taken care of its responsibilities under the expired license.
LCG’s CIF approval was revoked because the company hadn’t appointed at least “two persons who meet the requirements” to operate its brokerage business in Cyprus. Based on the information at the disposal of the CySEC and in order to protect the interests of the investors from being further compromised, the license of LCG Cyprus has been wholly withdrawn.
Following such settlements, CySEC often orders the company to take corrective measures within a set framework. However, the regulator confirmed that Atlantic Securities already paid the settlement fees and since such agreements are usually announced within six months of an inspection, the majority of issues should have already been resolved. Furthermore, it noted that all amounts payable from settlement agreements are considered revenue of the Treasury Department and do not go to CySEC’s pocket.