CySEC settled FXNet violations through an official agreement, reinforcing compliance and transparency in Cyprus financial sector.
CySEC settled FXNet violations through an official agreement, reinforcing compliance and transparency in Cyprus financial sector.
The Cyprus Securities and Exchange Commission (CySEC) announced that it settled FXNet violations by reaching an official agreement with FXNet Limited for potential violations of the Investment Services and Activities and Regulated Markets Law of 2017. FXNet runs the retail Forex and CFDs brokerage brand EMS Brokers through its website emsbrokers.com and operates from Limassol under CEO Kypros Papatheodoulou’s leadership.
CySEC stated that the settlement followed an investigation into FXNet’s compliance with several regulatory provisions during the period from 2021 to 2022. The review examined whether the company met authorization and operational requirements under Article 22(1) of the Law, which includes areas such as compliance, product governance, record keeping, and the safeguarding of client funds. Additionally, CySEC evaluated FXNet’s adherence to Article 25 concerning general principles and information provided to clients, as well as Article 26(3)(a) regarding the assessment of suitability and appropriateness of financial products.
Moreover, the investigation also covered Article 42 of Regulation (EU) No. 600/2014, which involves product intervention powers of competent authorities. This included the CySEC Directive DI87-09 that imposes restrictions on the marketing, distribution, and sale of Contracts for Difference (CFDs) to retail investors. CySEC emphasized that these assessments aimed to ensure fair practices and enhanced investor protection within the financial markets.
Following the review, CySEC confirmed that a settlement amounting to €225,000 had been reached with FXNet Limited. The company has already paid the full amount. CySEC noted that such settlements do not constitute an admission of guilt but rather serve to resolve potential breaches efficiently. However, they reinforce the regulator’s commitment to maintaining transparency and strict compliance within the investment services sector.
While CySEC did not disclose specific details of the findings, the regulator highlighted that these actions are part of its ongoing supervisory efforts to strengthen market integrity. By taking decisive measures against potential violations, CySEC continues to uphold its role in safeguarding investors and promoting responsible conduct among licensed financial entities in Cyprus.
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