FXGM parent Depaho Ltd settles on €270K fine with CySEC
Cyprus financial regulator CySEC has announced a fine of €270,000 settling charges against Depaho Limited, parent of Retail FX broker FXGM. The decision put out by CySEC on the matter (see full text below) is fairly vague, but hints at issues including proper organization of the company, conflicts of interest, and order execution.
We view this as the latest in a series of moves by the Cypriot regulator to “clean up” the Retail FX business which flourishes on the EU island state. Other recent fines handed out by CySEC include to Libertex, 24option, Tradernet, OffersFX, and FINFXPRO.
The text of the decision issued by CySEC follows:
29 September 2020
CYSEC Board Decision
Announcement date: 29.09.2020 Board decision date: 03.08.2020
Regarding: Depaho Limited
Legislation: Τhe Investment Services and Activities and Regulated Markets Law
Subject: Settlement €270.000
The Cyprus Securities and Exchange Commission («CySEC») would like to note the following:
CySEC, under article 37(4) of the Cyprus Securities and Exchange Commission Law of 2009, has the power to reach a settlement for any violation or possible violation, act or omission for which there is reasonable ground to believe that it took place in violation of the provisions of CySEC’s supervised legislation.
A settlement has been reached with the CIF Depaho Limited («the Company») for possible violations of Τhe Investment Services and Activities and Regulated Markets Law of 2017 («the Law»), as these appeared between January 2018 – July 2019, following CySEC’s investigations. More specifically, the settlement reached involved the assessment of the Company’s compliance with:
1. article 5(1) of the Law regarding the requirement for CIF authorisation,
2. article 22(1) of the Law, as to the authorisation conditions of articles 17(2) and 17(6) of the Law, regarding the organisational requirements with which a CIF is required to comply,
3. article 24(1) of the Law regarding conflicts of interest,
4. article 25, paragraphs (1) and (3), of the Law regarding the general principles and information to clients, and
5. article 28, paragraphs (1)(a), (5) and (7), of the Law regarding the execution of orders requirements.
The settlement reached with the Company, for the possible violations, is for the amount of €270.000. The Company has paid the amount of €270.000.
It is noted that all amounts payable from settlement agreements are considered revenue (income) of the Treasury of the Republic and do not constitute income of CySEC.