The Cypriot regulator highlighted that certain practices violate MiFIR regulations and the guidelines set by ESMA. The regulator recently revealed intentions to conduct on-site inspections of selected CIFs. RoboMarkets, a broker specializing in forex and CFDs and overseen by the Cyprus Securities and Exchange Commission (CySEC), has been instructed by CySEC to cease offering non-financial incentives like race tickets and “branded goods” to its individual clients.
This directive was announced by CySEC this week, with the decision being made earlier in March. CySEC body pointed out that RoboMarkets had been promoting such incentives online. Such promotions, however, are not in alignment with the European Union’s MiFIR, which aims to safeguard investors and the financial markets, as stated by CySEC. Moreover, CySEC expressed concerns that RoboMarkets was attempting to bypass a segment of the European Securities and Markets Authority’s (ESMA) guidelines concerning product intervention, designed to shield investors and maintain financial market stability.
The Cypriot regulator perceives RoboMarket’s promotional tactics, such as offering race tickets and branded items, as a strategy to lure clients into trading CFDs. These financial instruments, which enable investors to speculate on the future values of foundational assets like stocks or currencies, are deemed to be of high risk. In May, CySEC declared its plans to undertake on-site examinations and in-office assessments of regulated entities providing investment services to the public in Cyprus.
Besides the CySEC-regulated RoboMarkets Ltd, the scheme also runs the offshore broker RoboForex, operated by RoboForex Ltd, Belize, and regulated by FSC Belize. The offshore broker solicits clients in EEA regions and offers leverage of up to 1:1000.
Read our RoboMarkets and RoboForex report here
On-site evaluations, scheduled for the latter half of the year, will focus on a subset of Cyprus Investment Firms (CIFs). CySEC stated, “This initiative will enable CySEC to evaluate how CIFs adhere to MiFID II marketing communication standards and will further fortify investor protection in alignment with ESMA’s goals.“
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