The Cypriot financial regulatory authority Cyprus Securities and Exchange Commission (CySEC) announced that at its meeting held on 1 July 2024, it decided to impose an administrative fine of €200,000 on CIF IC Markets (EU) Ltd. The fine was for non-compliance with Article 42 of Regulation (EU) no. 600/2014 on financial instrument markets, as defined in paragraph 5 of DI87-09, to limit the trading, distribution or sale of contracts for differences (CFDs) to private clients.
The CEC stated that IC Markets engaged in activities which resulted in the circumvention of the requirements of paragraph 4(1)(a) of DI87-09, specifically the requirements relating to the payment of initial margin protection, as set out in Annex I of the Directive DI87-09.
Regarding the action of the CySEC, FNG received the following response from an official representative of IC Markets:
“IC Markets (EU) Ltd categorically denies the basis of the decision of the Cyprus Securities and Exchange Commission (CySEC) of 19 July 2024 and will vigorously appeal. The EKK ignored indisputably verified evidence and instead based its decision on information provided by a former employee who was fired for misconduct. This individual intimidated and threatened the Company with regulatory interference, claiming strong personal connections within CyC. In addition, the CEC appears to have made assumptions without providing concrete evidence, resulting in a decision based on speculation rather than facts. This raises serious questions about the impartiality and integrity of the regulatory process.
“This reliance on biased testimony, while ignoring indisputable evidence, suggests a pattern of selective and disproportionate regulatory enforcement by the CySEC, jeopardizing transparency, market integrity and fair competition. IC Markets is committed to challenging this decision through the appeals process.”
The regulatory authority stated that to determine the amount of the administrative fine, it took into account the following factors:
I. The seriousness attributed to violations of this kind, which are reflected in the administrative sanctions and measures provided for in article 71 paragraph 6 of the Law.
ii. The importance attached to ensuring that the persons subject to the supervision of CySEC fully comply with the provisions of Regulation (EU) no. 600/2014.
iii. The seriousness attributed to the obligation of CIFs not to take actions aimed at circumventing the restrictive measures referred to in OD87-09, which were established for the protection of investors.
iv. That the Company has a responsibility to comply with its obligations and that, with actions of the essential time, it did not ensure the protection of the interests of its customers, to which the regulatory authority attaches particular importance.
v. The long duration of the infringement.
vi. The financial strength of the Company.
vii. The fact that in 2021 the Company committed the same violation, with the result that this violation is considered a repeated behavior on its part, despite the fact that the Company assured Cymraeg of taking corrective measures.