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HomeRetail FXCySEC hits FXBFI, operator of 101investing, with €50,000 fine
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CySEC hits FXBFI, operator of 101investing, with €50,000 fine

As a result of the CySEC’s audits conducted between July 2020 to January 2021, several types of violations were found in multiple compliance areas. During the period under review, the company fell short in implementing effective policies, controls, and procedures to mitigate the risks associated with money laundering and terrorist financing. Of particular concern was their inadequate examination of transactions that exhibited a heightened vulnerability to involvement in such illicit activities.

In relation to the fine, CySEC said the violations related to non-compliance with the with section 58(e) of the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007, as well as paragraph 26 of the Directive on the prevention and suppression of money laundering and terrorist financing.

Back in August 2022, the watchdog imposed a substantial administrative fine of €150,000 in a separate regulatory action. At the time, CySEC explained that the penalty resolves allegations of non-compliance with regulatory requirements, including conflicts of interest and information provided to clients.

In addition, FXBFI was probed by Cysec for lack of compliance with regulatory requirements that govern the assessment of suitability and appropriateness of clients, as well as its obligation to execute orders on the most favourable terms to their customers.

To stay on top of compliance, Cypriot brokers must gain insights into the financial situation of the client, including his investment knowledge, experience, and objectives. The genesis of these requirements lies in the Markets in Financial Instruments Directive (MiFID II) regulation.

FXBFI 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.

Following such settlements, CySEC often orders the company to take corrective measures within a set framework. However, the regulator confirmed that FXBFI 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.

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