CySEC has announced that a settlement totalling €200k has been reached with Cyprus-based investment firm Colmex Pro.
Colmex Pro, a Cyprus-based investment firm, has agreed a €200,000 settlement with the Cyprus Securities and Exchange Commission (CySEC). The total sum, which has already been settled, relates to potential regulatory violations committed by the company over a two-year period.
In a press release issued on Tuesday, the Cyprus financial regulator confirmed that the settlement was reached following a supervisory review conducted at the company. Between 17th January 2021 and 24th February 2023, Colmex Pro were found to have acted in violation of both Cypriot and European Union (EU) laws, including:
- Article 5(1) of the Law, regarding the requirement for CIF authorization.
- Article 22(1) of the Law, as to the authorization condition laid down in article 17(2) of the Law, regarding the organizational requirements with which a CIF is required to comply.
- Article 24(1) of the Law, regarding the conflicts of interest.
- Article 25, sections (1), (2)(b), (3)(a) and (4)(a)(ii) of the Law, regarding the general principles and information addressed to clients.
- Article 26(3)(a) of the Law, regarding the assessment of appropriateness.
- Article 28(7) of the Law, regarding the obligation to execute orders on terms most favourable to the client.
- Article 42 of the Regulation (EU) Νο. 600/2014 regarding the product intervention by competent authorities, particularly paragraph 5 of the CySEC’s Directive DI87-09 for the restriction on the marketing, distribution, and sale of contracts for difference (CFDs) to retail clients.
The regulator noted that all funds received from the above settlement will be directed towards the Treasury of the Republic of Cyprus rather than becoming income generated for CySEC itself.
What is Colmex Pro?
Established in 2010, Colmex Pro is a Cyprus-based financial firm providing brokerage and trading services across several asset classes. Headquartered in Limassol, the company is authorised and regulated by CySEC, the country’s principal financial regulator.
Has Colmex Pro been fined before?
Yes, Colmex Pro has faced action from Cyprus’ market watchdog before. In 2019, the broker reached a settlement with CySEC totalling €50,000 settlement in relation to what is classed as potential regulatory violations.
Linked to this was another settlement amounting to €100,000, which was imposed on the company back in 2016. This addressed a range of issues, including inadequate policies and procedures for evaluating customer compatibility, knowledge, and experience.
The 2016 fine was broken down as follows:
- €40,000 for not appropriately informing clients about the risks of trading
- €30,000 for misleading advertising
- €20,000 for failing to properly address operational risks
- €10,000 for various other compliance and administrative issues
The regulator also ruled that Colmex Pro failed to mitigate against unnecessary risks, adding that information found on both the company’s website, marketing materials and online customer service was not sufficiently fair, clear or transparent.
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Alternatively, for a full rundown of the top brokerages registered in Cyprus, check out our guide to the Best CYSEC Regulated Forex Brokers.
