The Cyprus Securities and Exchange Commission (CySEC) has slapped Exelcius Prime Ltd with a hefty €740,000 fine for several breaches of the Investment Services and Activities and Regulated Markets Law of 2017.
The Cypriot watchdog provided a breakdown and specific details for the regulatory action, saying its decision was taken, based on a range of issues, from giving investment advice without authorization to poor operational standards.
Exelcius Prime, had its CySEC license suspended back two years ago, got a €45,000 fine for unauthorized investment advice. The operator of the now-defunct FX retail brand 1Markets also faced a €60,000 penalty for insufficient board commitment, lack of collective experience, and not having at least two qualified individuals directing the business.
A massive penalty of €240,000 was specifically levied for non-compliance with section 17’s organizational requirements. This included not having adequate policies and procedures, failing to review financial instruments for target-market needs, poor client service monitoring, and not providing necessary records to CySEC.
CySEC also fined Exelcius Prime €120,000 for not managing conflicts of interest between employees and clients and imposed another €110,000 fine for “not acting honestly, fairly, and professionally in client dealings, as required by section 25(1).”
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“A fine of €100.000 for violation of section 25(3)(a) of the Law, as the Company did not ensure that all information addressed to clients or potential clients was fair, clear and not misleading, taking into account the practices of the persons that communicated with the clients,” the statement reads.
Lastly, two €20,000 fines were given for not assessing the appropriateness of investment services for clients and for setting up a branch in the Czech Republic without informing CySEC.
CySEC said earlier that a key focus of its activity this year was the audit of promotional materials from over 35 CIFs. Where misleading content was identified, CIFs were directed to amend their promotional materials to ensure accuracy towards investors.
CySEC’s rigorous supervisory audits resulted in administrative sanctions totaling nearly €2.2 million in 2023, with a single CIF facing sanctions of €1 million. Over the last three years, the watchdog has imposed €6 million in sanctions for CIFs legislative breaches.
