CySEC hits TopForex parent with €400,000 fine
The Cyprus Securities and Exchange Commission (CySEC) announced that it has imposed a fine of €400,000 on Goldenburg Group Ltd (trading as TopForex) due to shortcomings in their regulatory obligations.
This decision is based on the findings of CySEC’s investigation into the company’s activities and has taken into account among other factors the seriousness attributed to such infringements.
In relation to the fine, CySEC stated that Goldenburg Group failed to implement proper policies to monitor the activities of its employees who acted as its marketing agents in Slovenia.
CySEC’s decision was based on the company’s violation of various provisions in the Investment Services and Activities and Regulated Markets Law of 2017 and the Regulation (EU) 1286/2014 related to key information documents for packaged retail and insurance-based investment products (PRIIPs).
In particular, CySEC found that Goldenburg Group didn’t establish effective arrangements to prevent conflicts of interest that could adversely affect its clients. The firm did not take adequate measures to identify, avoid, and manage conflicts of interest between its employees and customers in Slovenia.
Additionally, CySEC said that the company did not act in the best interests of its clients when providing investment services. Information provided to customers in Slovenia was misleading, and Goldenburg Group did not ensure that its employees giving investment advice possessed the necessary knowledge, it added.
Furthermore, the broker didn’t notify the Supervisory Authority of Slovenia in advance about posting key information documents (KIDs) on its website, as required by Slovenian national law. Additionally, Goldenburg Group omitted essential regulatory information in these key information documents.
The Chairman of CySEC, Dr George Theocharides, said: “CySEC takes any misconduct by supervised entities seriously and is determined to bring noncompliant operations to a halt in order to enhance investor protection and the responsible growth of the investment sector. The imposition of administrative fines is a key tool we use to reduce non-compliance, and we will continue to take action against CIFs that fail to comply with the obligations placed upon them. CIFs are urged to ensure that they fully comply with their regulatory obligations, with an emphasis on strengthening their compliance function to safeguard investor protection.”
The recent regulatory action comes more than two years after CySEC settled with Goldenburg Group, ordering the company to pay €270,000 for regulatory violations.
The firm, which operates several trading brands – including topforex.com, fxglobal.com, tradecentrum.com, and toptrader.eu – broke a number of EU regulations from period January 2018 until October 2020. This included articles regarding conflicts of interest, general principles and information to clients, the assessment of appropriateness to clients, the obligations of investment firms when appointing tied agents, and the conditions for the marketing, distribution or sale of CFDs to retail clients.
