CySEC hits ISPASS Technologies with €60,000 fine
The Cyprus Securities and Exchange Commission (CySEC) today announced that it has reached a settlement with ISPASS Technologies Limited, ordering the firm to pay €60,000 for violating the Investment Services and Activities and Regulated Markets Law.
As a result of the CySEC’s audits conducted between November 2021 and September 2022, several types of violations were found in multiple compliance areas. Per CySEC’s circular, the investigation focused on the company’s compliance with article 5(1) of the Law, which pertains to the requirements for CIF (Cyprus Investment Firm) authorization.
According to its website, ISPASS Technologies offers holistic solutions that are customized to suit the specific needs of its clients. These solutions encompass a wide range of services including web application development, mobile application development, integration with Meta Trader, payment gateway integration, third-party integrations, development of business intelligence systems, MT5 plugins development, and implementation of marketing automations.
Following such settlements, CySEC often orders the company to take corrective measures within a set framework. However, the regulator confirmed that ISPASS Technologies 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.
CySEC also clarified that the funds from settlement agreements are considered revenue for the Treasury of the Republic and not for the island-nation’s financial watchdog.
CySEC warns of ‘gamification’ and “finfluencers”
CySEC has recently released retail investment behaviour research showing what it views as a concerning rise in unregulated, volatile investment products.
The research also showed that too few spend enough time researching the products they plan to invest in or the firm selling them, raising concerns that investors did not understand the relevant risks. Of the retail crowd, a quarter revealed that they spent 6-7 days researching a particular product, 7% said they did less than 30 minutes due diligence or none at all before committing their money to a product.
Meanwhile, only 30% of all respondents looked up their broker on the website of the country’s regulator to check it was licensed. While 15% didn’t do any checks at all, more than half (51%) said they looked at company reviews or the firm’s own website.
With many people afraid of missing out on the chance to make easy money, Cypriot regulators also launched a campaign to educate its citizens on the potential risks involved when it comes to online trading.
The country’s financial regulatory body was behind the campaign, which warns of using colorful apps that make trading seem empowering instead of intimidating.