CySEC Sends Warnings to CIFs Doing Business in Spain

The Financial Commission / Regulatory Actions / CySEC Sends Warnings to CIFs Doing Business in Spain

Cyprus’ Securities and Exchange Commission, better known as CySEC, has issued a warning to its regulated investment firms (CIFs) regarding the “cross-border marketing of investment services by Investment Firms located in other EU countries.” 

The regulator is concerned with sales activities and the provisions of trading services by its regulated entities following a notice from Spain’s CNMV (National Securities Market Commission) regarding the marketing of financial products. Specifically, the Spanish regulator is concerned with CIFs who are using “overly aggressive tactics and practices” to offer Forex and CFD products to traders and in many cases, are using unlicensed 3rd parties to conduct such activities.

In its warning, CySEC noted that CNMV’s notice “refers to certain inappropriate, common practices followed by some IFs and contains a series of guidelines for due compliance with applicable rules and regulations. The aforementioned practices include, but are not limited to, the use of (i) aggressive marketing, (ii) unauthorized third parties to carry on the IFs’ marketing activities (e.g. affiliates, call centres, etc.), and/or client acquisition, and (iii) common websites in Spanish to market the activities of third-country firms within the EU.”

Furthermore, CySEC has indicated that it “highlights that the content of the CNMV’s public statement will form part of CySEC’s supervisory assessments”, meaning that it will take steps to separately monitor CIF activity in its adherence to Spanish and other EU country rules with regards to client solicitation and marketing activities.

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