The Cyprus Securities Exchange Commission (CySEC) announces that it has investigated the compliance of Forex broker AFX Capital Markets Ltd with The Investment Services and Activities and Regulated Markets Law and has decided to withdraw the Cyprus Investment Firm (CIF) authorisation of the company.
Let’s note that the public announcement is made several months after the meeting at which the decision for the licence withdrawal was made.
CySEC explains that the broker no longer meets the conditions under which the authorisation was granted. In particular, AFX Capital Markets is in violation of section 22(1) of L. 87(I)/2017 as it does not comply at all times with the conditions for authorisation established in:
- section 9, paragraphs (3), (9) and (16), of L. 87(I)/2017, regarding the Board of Directors,
- ➢ section 11(1)(b) of L. 87(I)/2017, regarding the suitability of shareholders, and
- ➢ section 17, paragraphs (2), (5)(a), (5)(b) and (9), regarding the organisational requirements.
Further, CySEC says that AFX Capital Markets has seriously infringed provisions of L. 87(I)/2017 and particularly section 25(3)(a) of the said law, as to the information that the company addressed to its clients.
Also, the company’s members of the Board of Directors, Messrs. Manuela Mazzacco, Andreas Lianos, Costas Georgiades, Elena Economides Demetriou and Andreas Papagapiou, have not complied with section 10(1)(a) of L. 87(I)/2017, as, while acting as Members of the Board of Directors of the Company, they did not define, and in effect did not oversee the implementation of, governance arrangements that ensure the effective and prudent management of the company, in a manner that promotes the integrity of the market and the interest of clients. At the material time, there was no compliance with the principles mentioned in section 10(1)(b), points (i), (ii) και (iv), of L. 87(I)/2017.
CySEC decided to impose to Mrs. Manuela Mazzacco, Executive Director of the Company, an administrative fine of €100,000 and a ban for a period of five years to exercise management functions in CIFs.
The regulator also imposes to Mr. Andreas Lianos, Executive Director of the Company, an administrative fine of €50,000 and a ban for a period of three years to exercise management functions in CIFs.
CySEC also impose fines of EUR 100,000 on the Company’s auditors, namely to:
- BDO Ltd will have to pay an administrative fine of €100.000, and
- Anthimos, Leonidou and Partners Ltd will have to pay an administrative fine of €100.000.
The penalties are for the violation of section 139(1) of the Investment Services and Activities and Regulated Markets Law of 2007 (L. 144(I)/2007), pursuant to section 141(1) of the said law, as they did not ensure or secure the correctness, completeness and accuracy of the report submitted to CySEC, pursuant to section 116 of L. 144(I)/2007, regarding the suitability of the measures taken by the Company for the protection of clients’ money, and specifically,
- (a) For BDO Ltd, concerning the report submitted to CySEC for the years ending 31.12.2014, 31.12.2015 και 31.12.2016,
- (b) For Anthimos, Leonidou and Partners Ltd concerning the report submitted to CySEC for the year ending 31.12.2017.