Key Insights
- Cyprus financial regulator CySEC fined Fiduserve Asset Management €50,000 for multiple violations of investment services laws
- Breaches included failure to assess client profiles, lack of disclosure on portfolio declines, and providing misleading information
- The penalty is CySEC’s second major enforcement action in 2024 as it cracks down on regulatory lapses in the investment sector
NICOSIA (MarketsXplora) – Cyprus’s financial regulator has imposed a total administrative fine of €50,000 ($54,000) on Fiduserve Asset Management Ltd, an investment fund manager licensed in the Mediterranean island nation, for multiple breaches of investment services laws.
The Cyprus Securities and Exchange Commission (CySEC) said on Tuesday the largest portion of the penalty, €20,000, was for Fiduserve’s failure to obtain necessary information about investors’ financial situations, investment goals and risk tolerance from June 2018 to October 2021.
Under Cypriot rules, investment firms must recommend suitable financial instruments aligned with clients’ profiles and risk appetites.
CySEC also fined Fiduserve €15,000 for not providing required periodic statements to investors whose portfolios were leveraged between December 2018 and October 2021.
The company additionally neglected to notify investors when their portfolio values decreased over 10% on multiple occasions from September 2019 to December 2020, resulting in a €5,000 sanction.
Finally, a €10,000 penalty was imposed for providing inaccurate, unclear and misleading information to investors.
“In arriving at the €50,000 total administrative fine, CySEC carefully considered several factors that underscored the gravity of Fiduserve’s violations,” the regulator said in a statement.
However, it added the fund manager’s cooperation during the investigation and clean record were factored into the final penalty decision.
The fine marks the second major enforcement action by CySEC already in 2024 as it continues a compliance crackdown on Cyprus’s investment services industry.
In February, it reached a €200,000 settlement with Fintailor Investments Ltd for potential anti-money laundering regulation breaches.
In December 2023, CySEC imposed penalties on Naga Markets Europe Ltd and Begin Capital Markets of €150,000 and €50,000 respectively for various regulatory lapses.
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The regulator has also maintained a public warning list of unauthorized investment services providers, adding 10 new websites in late February.
Cyprus is a regional investment fund hub. CySEC oversees over 800 entities providing investment and other financial services on the European Union member island.
Regulatory sources said the enforcement actions aimed to enhance governance and transparency in the Cypriot investment sector.