Cyprus cracks whip on margin foreign exchange brokers

Margin foreign exchange broker EToro (Europe) is to pay €50,000 in settlement of charges brought against it by the Cyprus Securities and Exchange Commission (CySEC).

In a statement issued on February 12, CySEC said the settlement reached concerned weaknesses in the application of the Investment Services and Activities and Regulated Markets Law of 2007, as amended by Etoro. The alleged weaknesses related to the organisation/operation structure (articles 18 and 36 of the Law) of the company in its early days of operation in 2010 and have since been rectified.

An official for eToro reiterated that the fine on eToro was imposed in relation to alleged weaknesses in the early stages of eToro operation back in the year 2010. "All weaknesses have been rectified as confirmed by CySEC. We are working in full cooperation with CySEC to make sure that we follow the highest compliance standards," said an official at eToro.

CySEC issued a notice on February 14 restating that a company settling charges brought against it might not be guilty of wrong-doing but will be subject to on-going inspections.

It also highlighted that the amounts due from settlement agreements are calculated as revenue (income) to the Treasury of the Republic and are not calculated as an income for CySEC.