CySEC slaps Cyprus firm with €360,000 fine
The Cyprus Securities and Exchange Commission (CySEC) on Friday announced a decision to impose fines amounting to €360,000 on the Cyprus Investment Firm (CIF) MCA Intelifunds.
“The Board of CySEC reached this decision after identifying a series of violations of the Investment Services and Activities and Regulated Markets Law of 2017 by MCA Intelifunds following an inspection of the CIF conducted in September 2022,” the commission said.
According to CySEC, MCA Intelifunds has been fined for several violations. The first fine of €80,000 was imposed for “failure to comply at all times with the authorisation condition of the Law by not establishing adequate policies and procedures sufficient to ensure its compliance with its obligations”.
A fine of €150,000 was levied after it was found that the CIF “did not act honestly, fairly and professionally when providing investment services to clients, in accordance with their best interests”.
Another €25,000 fine was imposed due to the CIF’s “failure to assess the compatibility of the financial instruments it offered or recommended with the needs of the clients to whom it provided investment services”.
Also, CySEC said that this fine was due to the company “not taking into account the identified target market of end-clients, and not ensuring that those financial instruments being offered or recommended were in the interest of the client”.
Additionally, a €25,000 fine was issued “as the CIF, which manufactures financial instruments (CFDs) for sale to clients, did not take reasonable steps to ensure that the financial instruments were distributed to the identified target market”.
Moreover, a fine of €60,000 was imposed “as the CIF did not require clients or potential clients to provide all necessary information regarding that person’s knowledge and experience in the investment field, relevant to the specific type of product offered, so as to enable itself to assess whether the product envisaged was appropriate for the client”.
Finally, a €20,000 fine was levied “for the CIF’s failure to properly warn the client or the potential client, on the basis of the information received, that the product or service was not appropriate” for them.
The commission explained that in order to impose the administrative fines, CySEC took into account, among other factors, the “importance attached to ensuring that persons subject to its supervision fully comply with the provisions of the law”.
CySEC also took into account that “the CIF has the responsibility to comply with its obligations and that, with its omissions at the essential time, it did not ensure the protection of its clients’ interests, to which CySEC attaches particular importance“.
The commission also stressed that the CIF’s obligation is “to act honestly, fairly and professionally as a measure to strengthen the confidence of investors in the market as well as the need to collect information regarding the experience and knowledge of its clients”.
This, the commission explained, “allows CIFs to better assess whether an investment service or financial instrument is compatible with a client”.
“It is also important that the CIFs inform the client when a product or service is not compatible to enable them to make informed decisions,” CySEC concluded.