CySec fined €175.000 a Cyprus Investment Firm
The Board of the Cyprus Securities and Exchange Commission (CySec) has issued an announcement to inform investors that, at its meeting held on December 05, 2016, decided to impose a total administrative fine of €175.000 on the CIF Novox Capital Ltd (the ‘Company’) for noncompliance with the following,:
1. the Investment Services and Activities and Regulated Markets Law of 2007, as amended from time to time (‘L.144(Ι)/2007’),
2. the Directive DI 144-2007-01 of 2012 of the Securities and Exchange Commission for the Authorisation and Operating Conditions of CIFs (‘Directive 1’),
3. the Directive DI 144-2007-02 of 2012 of the Securities and Exchange Commission for the professional competence of Investment Firms and the natural persons employed by them (‘Directive 2’).
The administrative fine imposed on the Company is broken down as follows:
Α. €70.000 for non-compliance with Section 6(8) of L.144(Ι)/2007 as it provided the investment service of investment advice without an authorisation to provide the said service.
Β. €10.000 for non-compliance with Section 28(1) of L.144(Ι)/2007 as it failed to comply at all times with the authorization and operating conditions, as laid down in Section 18(2)(a) of L.144(Ι)/2007 and paragraphs 4(1)(c) and a(1)(f) of Directive 1, since:
i. The Company did not maintain an internal operation in relation to the approval of marketing material.
ii. The Company did not maintain adequate and orderly records of its business in relation to the marketing material.
C. €20.000 for non-compliance with Section 28(1) of L.144(Ι)/2007 as it failed to comply at all times with the authorization and operating conditions, as laid down in Section 18(2)(d) of L.144(Ι)/2007 and paragraph 16(3) of Directive 1, as it did not establish, implement and maintain adequate policies and procedures in order to exercise due skill, care and diligence when entering into, the arrangement for the outsourcing of customer support to 3rd party.
D. €30.000 for non-compliance with Section 36(1) of L.144(I)/2007 as it failed to act fairly, honestly and professionally in accordance with the best interests of its clients.
Ε. €30.000 for non-compliance with Section 36(1)(a) of L.144(Ι)/2007 and paragraph 6 of Directive 2, as the information that the Company addressed to its clients or potential clients via the employees of the sales and customer service departments and from the marketing communications were not fair, clear and non-misleading, as defined in Section 36(1)(a) of L.144(Ι)/2007 and the Company failed to ensure that these comply with the terms of paragraph 6, sub-paragraph (2) of Directive 2.
F. €15.000 for non-compliance with Section 36(1)(b) of L.144(Ι)/2007 as the information provided to clients or potential clients is not appropriate so that they are reasonably able to understand the nature and risks of the specific type of investment service and of the proposed financial instrument in accordance with Section 4(2) and 7-12 of Directive 2.
Source: CySec (in Greek) – CySec Decision to impose Administrative fine to Novox Capital Ltd