Cyprus financial regulator CySEC has announced that a settlement has been reached with CIF license holder FXNet Limited, for possible violations of the Investment Services and Activities and Regulated Markets Law of 2017.
FXNet operates the Retail FX and CFDs brokerage brand EMS Brokers (website emsbrokers.com). The company is run from Limassol, Cyprus, led by longtime CEO Kypros Papatheodoulou.
More specifically, CySEC said that its investigation for which the settlement was reached involved assessing the Company’s compliance, for the period from 2021 to 2022, following reviews, with regard tο:
1. Article 22(1) of the Law, as to the authorisation conditions and, specifically, as to the conditions laid down in articles:
i. 17(2) of the Law – Organizational requirements – Compliance.
ii. 17(3)(c) of the Law – Organizational requirements – Product governance.
iii. 17(6) and 17(7)(a) of the Law – Organizational requirements – Record keeping.
iv. 17(9) of the Law – Organizational requirements – Safeguard of clients’ funds.
2. Article 25, sections (1) and (3)(a) of the Law, regarding the general principles and information addressed to clients.
3. Article 26(3)(a) regarding the assessment of suitability and appropriateness and reporting to clients.
4. Article 42 of the Regulation (EU) Νο. 600/2014 regarding the product intervention by competent authorities, particularly paragraph 5 of the CySEC’s Directive DI87-09 for the Restriction on the Marketing, Distribution, and Sale of Contracts for Difference (CFDs) to Retail Clients.
The settlement reached with the Company for the possible violations is for the amount of €225,000, which the Company has already paid.
