France monetary regulator Autorité des Marchés Financiers (AMF) has introduced that its AMF Enforcement Committee has fined a French tied agent of a Cypriot funding providers supplier and its supervisor a complete of €400,000, for breaches of their skilled obligations.
In its resolution of November 10, 2023, the Enforcement Committee imposed a superb of €300,000 on France Protected Media (FSM) and banned it from performing as a tied agent and from offering reception and transmission of orders (RTO) service for 10 years. It additionally fined its supervisor, Lior Mattouk, €100,000 and banned him from managing or directing any entity working as a tied agent and offering RTO service for 10 years.
The Enforcement Committee discovered 5 units of breaches for occasions that happened between January 2019 and September 2021, in relation to FSM’s RTO enterprise on behalf of third events. As a tied agent of Cypriot funding providers supplier VPR Protected Monetary Group Restricted, FSM provided its shoppers the chance to subscribe to contracts for distinction (CFDs) by means of accounts accessible on a web based platform referred to as “Alvexo”. A tied agent is an middleman who acts on behalf of a service supplier.
Alvexo is a Cyprus-based, France and Italy centered Retail FX and CFDs brokerage model. We’d be aware that VPR / Alvexo itself has run into some points with its regulator in Cyprus. In 2021 Alvexo operator VPR was fined €100,000 by CySEC for CFD advertising. And in August 2022 CySEC partially suspended VPR/Alvexo’s CIF license concerning a bunch of violations, together with not showing to behave pretty, actually and professionally when offering funding providers to shoppers, and deceptive promoting. VPR’s license was reinstated by CySEC final month.
Relating to the fines to FSM and Lior Mattouk, the Fee discovered that FSM had not demonstrated that it had checked that its gross sales workers had a minimal qualification and adequate stage of information, and that FSM had offered the inspection crew with a take a look at to evaluate the information of its gross sales workers which had been drawn up after the beginning of the investigation interval and whose content material was insufficient.
It then identified the inadequacy of the questionnaire used to evaluate shopper information and expertise and the inappropriateness of the scoring system related to this questionnaire. As well as, it discovered that account managers interfered with the method of assessing potential shoppers by asking them to alter their solutions or to finish the questionnaire once more, thereby rendering the questionnaire ineffective. The Fee thought-about that FSM was due to this fact unable to find out whether or not its shoppers or potential shoppers had the mandatory expertise and information to know the dangers related to the services or products provided.
It additionally discovered shortcomings in FSM’s promotional communications for CFDs, noting the absence of an applicable warning in regards to the dangers related to CFDs in promotional banners and the failure to adjust to the prohibition on selling CFD accounts apart from restricted danger accounts.
As well as, the Fee discovered that FSM had did not adjust to its obligation to tell its shoppers and potential shoppers of its tied agent standing and of the id of its principal when it got here into contact with them.
Lastly, it thought-about that FSM had did not train due care and diligence in relation to the audit.
The Fee discovered that FSM’s failures have been attributable to its supervisor, Lior Mattouk.
The AMF famous that an attraction could also be lodged towards this resolution.