The Cyprus Securities and Exchange Commission (CySEC) has fined the brokerage firm FXNET €225,000 for a series of compliance failures.
The settlement relates to a CySEC investigation into the firm’s operations between 2021 and 2022. The regulator found potential breaches of EU and Cypriot financial laws designed to protect investors.
Key Areas of Non-Compliance Identified
The investigation identified shortcomings in several key areas of the company’s operations. These included its internal organizational requirements, specifically concerning compliance, product governance and record-keeping. CySEC also found issues with how the firm safeguarded its clients’ money.
Other areas of concern involved the company’s adherence to general conduct rules and the clarity of its communications with clients. The regulator also cited failures in the firm’s processes for assessing whether investments were suitable for its customers and in its subsequent reporting.
CFD Marketing Practices Under Scrutiny
A specific part of the investigation focused on FXNET’s compliance with EU-wide restrictions on the marketing of high-risk contracts for difference (CFDs) to retail investors.
The company has paid the €225,000 settlement in full. CySEC noted that such fines are transferred to the government treasury of the Republic of Cyprus and do not directly fund the regulator.
As previously reported, CySEC launched an online quiz aimed at testing your ability to detect financial scams: Answer a series of questions and discover whether your instincts are sharp or if you’re just one convincing scam away from falling victim.
Each question came with a clear answer and a direct explanation, often accompanied by links to further educational material. It serves as a compact, practical guide to help users avoid financial pitfalls in the digital world.
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