The Cyprus Securities and Exchange Commission (CySEC) has imposed a €1 mln fine on the Cyprus Investment Firm Itrade Global, for dishonest practices and tolerating conflict of interest by its Spanish tied agent.
Itrade operates the forex/CFDs brands TradeFW, InvestFW and TradedWell.
“CySEC takes any misconduct by supervised entities seriously and is determined to bring non-compliant operations to a halt in order to enhance investor protection and the responsible growth of the investment sector,” said CySEC Chairman George Theocharides.
“CIFs are urged to ensure that they fully comply with their regulatory obligations, with an emphasis on strengthening their compliance function and revaluating the competence of the staff, in particular the personnel of their sales and marketing functions,” Dr Theocharides added.
CySEC said it reached this decision due to the company’s infringement of multiple provisions of the Investment Services and Activities and Regulated Markets Law of 2017.
“In particular, Itrade Global failed to implement policies and procedures to monitor the activities of its tied agent in Spain, when acting on its behalf.”
The law provides that CIFs remain fully and unconditionally responsible for any action or omission on the part of their tied agents acting on their behalf, CySEC said in an announcement, acknowledging that the Spanish regulator, National Securities Market Commission (CNMV), provided assistance in the case.
CySEC said that Itrade Global (Cy) Ltd through its tied agent did not take appropriate steps to identify and to prevent or manage conflict of interests, did not act fairly, honestly and professionally when providing investment services to clients and did not ensure that all information addressed to clients was fair, clear and not misleading.
The Cypriot regulator added that Itrade Global, through its tied agent, failed to ensure that persons providing information about financial instruments, investment services or ancillary services to clients on behalf of the company possessed the necessary knowledge and competence to fulfil their obligations under the law.
“Further, it did not request clients to provide the appropriate information regarding their knowledge and experience in order to assess whether the offered product or service was appropriate for them.”
CySEC concluded that its decision also found the company’s infringements in compliance function, the product approval process and its obligation for keeping records of telephone conversations.