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100 thousand EUR penalty for a broker from Cyprus and further warnings from regulators

100 thousand EUR penalty for a broker from Cyprus and further warnings from regulators

created Paweł MosionekDecember 28, 2016

CySEC, the Cypriot institution supervising the national financial market, issued a communiqué imposing a fine of EUR 100 on the Colmex Pro Ltd. broker in connection with the violation of the rules set out in the Investment Services and Activities and Regulated Markets Law document. The penalty consists of four parts and concerns 000) errors and incorrect rules in informing customers and assessing customer compliance (EUR 1), 10) no risk reduction when using outsourcing companies (EUR 2), 20) misleading customers in promotional materials and on the website (EUR 3 thousand) and 30) not collecting enough information about customer experience and knowledge in the context of assessing whether the services offered by the company are appropriate for them (EUR 4 thousand). The violations are significant, however, the relatively mild decision was justified by Colmex's early start to implement the modifications.

In addition, regulators in Italy, France and Canada issued warnings regarding the conduct of unauthorized activities by a total of 11 companies.

CONSOB (Italy):

  • Advanced Binary Technologies Ltd (www.ayrex.com)
  • Cumberland Capital Ltd (www.tropicaltrade.com)
  • Altair Entertainment Nv, Payific Ltd and Capital Force Ltd (www.option888.com)
  • Brooks Partners, Pel Ltd and S&Y Market Kft (www.brooks-partners.com)
  • Broker Yard, Techofin Ltd and OCapital Lp (www.brokeryard.com)

AMF (France):

  • FINANCIKA (SHARP TRADING) LTD (www.financikatrade.com)
  • usurpation de GN INVEST AG (www.gninvest-ag.com)
  • INVESTING SECURE INTERNATIONAL LTD (www.investing-secure-international.com)
  • MRT TECHNOLOGY LIMITED (www.mrtmarkets.com)
  • THRUST MARKETS (www.thrustmarkets.com)

BCSC (Canada):

  • Royal Downing Investments

Why is it worth cooperating only with regulated entities?

Having the right licenses and permits is primarily a signal for us that the company operates in accordance with applicable regulations. Thus, having the appropriate license is a signal to us that the broker has met a number of requirements set by the supervisory body, which at the same time watches over the security of trade. Trading with an unlicensed broker means that we are deprived of any guarantee of capital in the event of bankruptcy, and all disputes on the trader-broker line will be settled only in the court belonging to the broker registration site, without the intervention and support of the regulator.

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About the Author
Paweł Mosionek
An active trader on the Forex market since 2006. Editor of the Forex Nawigator portal and editor-in-chief and co-creator of the ForexClub.pl website. Speaker at the "Focus on Forex" conference at the Warsaw School of Economics, "NetVision" at the Gdańsk University of Technology and "Financial Intelligence" at the University of Gdańsk. Twice winner of "Junior Trader" - investment game for students organized by DM XTB. Addicted to travel, motorbikes and parachuting.