CySec Fines OptionBit

It seems as if the Cyprus Securities and Exchange Commission (CySec) is indeed getting serious when it comes to dealing with brokers who do not keep to the law.

They have just fined the Binary Options broker OptionBit’s parent company, Novox capital €175,000 over a number of violations. These included the feisty number of €70,000 for offering investment advice to clients without the correct authorizations to do so.

Novox Capital was also fined €10,000 for failing to implement adequate policies and procedures in order to ensure that it was still compliant with the financial services law outlined by CySec.

They were also fined €20,000 for failing to properly vett the outsourcing services and it used. According to CySec, the company did not “act with due skill, care and diligence in the management of outsourcing customer service to third parties”.

It appears as if Novox Capital did not provide adequate supervision of the actions of individuals at the call center. They also did not rectify any areas of concern when it came to inappropriate sales practices. Novox also didn’t have any protocols in place in order to determine the performance of the outsourced sales center.

OptionBit also failed to maintain the correct internal promo material approval mechanisms. They also did not maintain any business operation records. The company was also fined an additional €15,000 for failing to properly warn clients about the risks associated with trading Binary Options.

CySec also claims that OptionBit was not acting in the best interest of their clients for which it was fined another €30,000. The individuals in these call centers provided information to clients which was not fair and sometimes misleading.

What this clearly shows is that CySec regulated brokers will have to carefully consider the risks associated with non-compliance going forward. It also means that traders can take comfort from knowing that a Binary Options broker is regulated.