Cypriot financial regulator Cyprus Securities and Exchange Commission (CySEC) has announced that at its meeting held on the 1st of July 2024, it decided to impose an administrative fine of €200,000 to the CIF IC Markets (EU) Ltd. The fine was for non-compliance with article 42 of Regulation (EU) no. 600/2014 on markets in financial instruments, as specified in paragraph 5 of DI87-09, for the restriction on the Marketing, Distribution or Sale of Contracts for Differences (CFDs) to Retail Clients.

CySEC stated that IC Markets participated in activities that resulted in the circumvention of the requirements of paragraph 4(1)(a) of DI87-09, and specifically the requirements regarding the payment of initial margin protection as defined in Annex I of Directive DI87-09.

With regards to the CySEC action, FNG received the following response from an official spokesperson at IC Markets:

“IC Markets (EU) Ltd categorically denies the basis of the Cyprus Securities and Exchange Commission’s (CySEC) decision dated July 19, 2024, and will rigorously pursue an appeal. CySEC has disregarded irrefutable audited evidence and instead based its decision on information provided by a former employee, who was terminated for misconduct. This individual bullied and threatened the Company with regulatory involvement, claiming strong personal connections within CySEC. Furthermore, CySEC 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 undeniable evidence, suggests a pattern of selective and disproportionate application of regulatory authority by CySEC, endangering transparency, market integrity, and fair competition. IC Markets is committed to challenging this decision through the appeal process and has commenced legal action against CySEC.”

The regulator stated that in order to determine the amount of the administrative fine, it took into account the following factors:

i. The seriousness attached to violations of this kind, which reflected by the administrative sanctions and measures provided for in the article 71(6) of the Law.

ii. The importance attached to ensuring that the persons subject to supervision of the CySEC fully comply with the provisions of Regulation (EE) no. 600/2014.

iii. The seriousness attached to the obligation of CIFs not to engage in actions with the aim of circumventing the restrictive measures mentioned in OD87-09, which were enacted to protect investors.

iv. That the Company has a responsibility to comply with its obligations and that, with actions of the essential time, did not ensure the protection of their interests of its customers, to which the regulator attaches particular importance.

v. The long duration of the offense.

vi. The financial strength of the Company.

vii. The fact that in 2021, the Company committed the same violation, resulting in the present violation to be deemed repeated behavior on its part, despite the fact that the Company assured CySEC of taking corrective measures.