The Cyprus Securities and Exchange Commission (CySEC) today announced that it has reached a settlement with BCM Begin Capital Markets CY Ltd, ordering the firm to pay €50,000 for violating the Investment Services and Activities and Regulated Markets Law.
BCM Begin Capital Markets, previously known as OX Capital Markets Limited, runs several trading brands, including CapitalPanda and ProfitLevel. In December 2022, CySEC revealed a separate settlement of €100,000 with the company due to breaches in investment regulations. This settlement followed the broker’s prior payment of €170,000 to the Cypriot regulator, which occurred six months earlier, for violating similar sections of market laws spanning from January 2021 to April 2022.
The CySEC’s previous investigation focused on two specific areas where BCM Begin Capital Markets might have violated regulations. These include breaches related to general principles and information provided to clients, and certain requirements linked to the authorization of Cyprus Investment Firms (CIFs).
The recent prob leading to this settlement was centered on the company’s compliance in offering investment services to clients in Slovenia. The specific areas of CySEC’s concern included the requirement for its CIF authorization under Article 5(1) of the Law, organizational requirements compliance, conflicts of interest management, and compliance to general principles and client information requirements. It also included the company’s assessment of client appropriateness as required by Article 26(3)(a), the drafting and presentation of key information documents as mandated by Articles 5(2) and 8(3) of the Regulation.
To stay on top of compliance, Cypriot brokers must gain insights into the financial situation of the client, including his investment knowledge, experience, and objectives. The genesis of these requirements lies in the Markets in Financial Instruments Directive (MiFID II) regulation.
Following such settlements, CySEC often orders the company to take corrective measures within a set framework. However, the regulator confirmed that BCM Begin Capital Markets already paid the settlement fees and since such agreements are usually announced within six months of an inspection, the majority of issues should have already been resolved.