The Cyprus Securities and Exchange Commission (CySEC) this week announced that it has imposed a total administrative fine of €50,000 on Cypriot investment firm (CIF) IC Markets (EU) Ltd.
According to the announcement, the fine was imposed for violations of the Investment Services and Activities and Regulated Markets Law of 2017 (L.87(I)/2017).
In addition, CySEC said that the issuing of the fine follows a decision by the commisison’s board on July 1, 2024.
The commission explained that the fine was issued for three separate infringements.
Firstly, CySEC determined that IC Markets had failed to take sufficient steps to achieve the best possible outcome for its clients when executing orders, a breach of section 28(1)(a) of the law, resulting in a €30,000 penalty.
A further €10,000 fine was imposed for the company’s failure to implement effective arrangements to ensure compliance with the same section, in violation of section 28(4).
Additionally, IC Markets was fined another €10,000 for not providing clients with clear information regarding costs and charges, thereby preventing them from fully understanding the impact of these fees on their investment returns, a breach of section 25(4)(b).
In its official announcement, CySEC underlined the importance of these regulatory obligations, stating that “the protection of client interests is paramount, and this is ensured through measures that guarantee a CIF executes its clients’ orders to their benefit, securing the best possible outcome”.
CySEC also considered the severity of the breaches, adding that the fines reflected “the importance placed on compliance with L.87(I)/2017, especially given the significance of safeguarding investor interests”.
Furthermore, the regulator also acknowledged the company’s cooperation and its efforts to implement corrective measures, noting that IC Markets had taken steps to rectify the issues following the violations.
However, the commission stated that IC Markets had no prior record of similar breaches, which was factored into the penalty decision.
What is more, CySEC stated that “clear communication regarding the costs and cumulative effect on investments is critical, and companies must ensure transparency to foster trust with their clients”.
In determining the fines, CySEC also took into account the company’s financial standing, the seriousness of the breaches, and the legislator’s emphasis on compliance with the law.
