The Cyprus Securities and Exchange Commission (CySEC) has taken decisive action against Fiduserve Asset Management Ltd by imposing a significant administrative fine of €50,000.
The firm, which is a licensed investment fund manager in Cyprus, faced repercussions for various infringements of the Investment Services and Activities and Regulated Markets Law.
CySEC’s penalty is rooted in Fiduserve’s failure to adhere to key regulatory requirements.
Notably, the largest portion of the fine, €20,000, was for the company’s negligence in gathering essential details about their investors’ financial conditions, investment goals, and risk tolerance from June 2018 to October 2021.
This omission contravened regulations mandating that investment firms tailor their financial instrument recommendations to match the profiles and risk appetites of their clients.
Moreover, the regulatory body imposed a €15,000 fine on Fiduserve for not providing investors with periodic statements containing necessary information for those with leveraged management portfolios between December 2018 and October 2021.
The company also faced criticism for its failure to alert investors about more than 10% decreases in their portfolio values on several occasions from September 2019 to December 2020.
An additional €5,000 was levied for the firm’s oversight in updating investors about how their investments matched their preferences and objectives during the same period.
Furthermore, Fiduserve was fined €10,000 for disseminating inaccurate, unclear, and misleading information to investors.
In determining the total fine, CySEC weighed the severity of Fiduserve’s violations against its cooperation during the investigation and its previously clean record.
This action against Fiduserve represents the second major fine CySEC has issued in 2024, following a €200,000 settlement with Fintailor Investments Ltd in February for potential anti-money laundering regulation breaches.
CySEC’s commitment to regulatory enforcement was further demonstrated in 2023 through settlements and fines against other firms, including a €150,000 settlement with Naga Markets Europe Ltd and a €50,000 penalty against Begin Capital Markets for regulatory infringements.
Additionally, to protect investors, CySEC recently expanded its list of unauthorized service providers, emphasizing its ongoing vigilance in the financial services sector.