CySEC slaps €150,000 fine on FXBFI, operator of 101investing brand

abdelaziz Fathi

The Cyprus Securities and Exchange Commission (CySEC) today announced that it has reached a settlement with FXBFI Broker Financial Invest Ltd, trading as 101investing, ordering the firm to pay €150,000 for violating the Investment Services and Activities and Regulated Markets Law.

In relation to the fine, CySEC said the violations related to non-compliance with the Directive DI144-2014-14, and in particular with the authorisation conditions laid down in the articles 5 (1), 24, 25 and 26 (3). According to the watchdog’s statement, these terms concern certain authorisation conditions and organisational requirements with which a CIF is required to comply.

CySEC has further explained that the settlement resolves allegations of non-compliance with other articles that cover multiple 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 have to gain insights into the financial situation of the client, including his investment knowledge, experience, and objectives. The genesis of these requirements lies in 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.

As a result of the CySEC’s audits conducted between February to August 2020, several types of violations were found in five compliance areas. The following hierarchy of problems running from most common to least common was observed, according to the watchdog:

  1. Article 5(1) of the Law regarding the requirement for CIF authorization.
  2. Article 24 of the Law regarding conflicts of interest.
  3. Article 25, sections (1) and (3), of the Law regarding the general principles and information addressed to clients.
  4. Article 26(3)(a) of the Law regarding the assessment of suitability and appropriateness and reporting to clients.
  5. Paragraph 21(g) of the Directive DI144-2014-14regarding the variable elements of remuneration

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.

Read this next

Digital Assets

Revolut receives FCA’s go-ahead to launch crypto trading

British fintech and banking firm Revolut has received a regulatory go-ahead to launch its cryptocurrency services in the UK.

Digital Assets

GBTC share is trading at 36% below bitcoin spot price

Grayscale Bitcoin Trust share has widened its discount relative to the underlying cryptocurrency held in the fund, the highest margin ever since its debut in 2013. Digital Currency Group’s flagship GBTC shares traded at a discount of 35.8% to net asset value (NAV) today.

Digital Assets

Crypto lender Nexo investigated by 8 US state regulators

State securities regulators in New York, California, Kentucky, Maryland, Oklahoma, South Carolina, Washington and Vermont are investigating crypto lender Nexo for allegedly failing to register its Earn Interest Product.

Metaverse Gaming NFT

Astar Network’s ad features 329 top brands to support Web3 in Japan

Blockchain innovation hub Astar Network is making strides in promoting the Web3 adoption worldwide. In yet another milestone, the smart contracts platform has run a national newspaper ad in Japan that set a new global record with participation from 329 blue-chip firms.

Digital Assets

Pyth Network welcomes onchain data from crypto market maker Auros

“By sharing our high-frequency trading data with a truly onchain decentralized network, we aim to foster innovation that will lead to better financial solutions for all participants.”

Digital Assets

Tokeny integrates Ownera to boost liquidity of tokenized assets

“The adoption of FinP2P will result in higher liquidity and better access to capital and assets by providing regulated firms with one secure point of connection to multiple digital asset networks across the globe.”

Digital Assets

BingX launches subsidy vouchers to cover user losses in copy trading

“With the introduction of copy trade subsidy vouchers, new users can easily try out trading strategies without incurring losses.”

Digital Assets

Talos expands sales team: Frank van Zegveld, Matt Houston, Hillary Conley

“The extensive leadership and industry expertise of these new hires will enable us to build long-lasting relationships as we continue to build out our global presence in EMEA and beyond.”

Executive Moves

FX and CFD broker Emporium Capital hires industry veteran Robert Woolfe as COO

His past experience within the FX and CFD industry includes top roles at Capital Index, London Capital Group, GKFX, ETX Capital, and IG.  “I’m delighted to be part of the Emporium Capital team and spearheading the brokerages global expansion plans”, he said about the appointment.

<