CySEC Slaps €740,000 Fine on Exelcius Prime Ltd for Multiple Violations

The Cyprus Securities and Exchange Commission (CySEC) announced on Wednesday the imposition of administrative fines totaling €740,000 on the Cyprus Investment Firm (CIF) Exelcius Prime Ltd. This decision came after a series of violations of the Investment Services and Activities and Regulated Markets Law of 2017.

CySEC chairman George Theocharides emphasized, “CIFs are urged to ensure that they fully comply with the provisions of the law and must act within the framework of their operating license.” He further added, “CySEC attributes great importance, among others, to the responsibility that CIFs have in terms of the knowledge and skills of individuals in key positions to ensure the effective operation, supervision, and governance of the CIF, as well as the interests of the CIF and its clients.”

According to the commission’s official announcement, Exelcius Prime Ltd faced multiple infractions leading to the fines. The firm was fined €45,000 for providing investment advice as a regular occupation without proper authorization from CySEC. An additional €60,000 was imposed for non-compliance with section 9 of the law, which mandates adequate board member engagement and a suitable board composition. The firm failed in these areas and in directing its business activity with at least two persons, as required.

A significant portion of the fine, €240,000, was due to ongoing non-compliance with section 17 of the law concerning organizational requirements. This included failures to establish adequate policies and procedures, review the suitability of financial instruments, and manage outsourcing risks. Moreover, Exelcius Prime Ltd was fined €120,000 for not adequately addressing conflicts of interest between employees and clients.

Further fines included €110,000 for failing to act in the best interests of clients, €25,000 for not considering the target market of end clients, and €100,000 for misleading client communications. Additionally, CySEC imposed a fine of €20,000 for not assessing investment service appropriateness and another €20,000 for establishing a branch in the Czech Republic without prior CySEC approval.

The fines were determined based on several factors, including the seriousness of the violations and the maximum penalty allowable under the law. CySEC emphasized the necessity for CIFs to operate within their licensing framework, ensuring effective board supervision, appropriate governance, and adherence to operational policies. The commission also highlighted the importance of protecting client interests by avoiding conflicts of interest and ensuring that financial products are suitable for the target market.

Theocharides stated, “CIFs must act fairly, honestly and professionally as a measure to enhance investor confidence in the market.” He concluded, “A strong commitment of CySEC is the responsible growth of the investment sector, which is based on strict supervision to ensure the protection of investors.”

By fLEXI tEAM