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RoboMarkets Banned by CySEC from Offering Non-monetary Rewards to Retail Customers

2023-08-24 Brokersview

CySEC orders RoboMarkets to stop giving non-monetary rewards such as race tickets to retail clients

Regulated by the Cyprus Securities and Exchange Commission (CySEC), forex and contracts for difference (CFD) broker RoboMarkets has been banned by the oversight body from providing non-monetary rewards such as race tickets and "branded merchandise" to its retail clients. CySEC announced this decision on Wednesday and pointed out that its board of directors made the decision earlier in March.

According to CySEC, RoboMarkets provided its clients with such non-monetary rewards through its website and social media platforms. However, CySEC noted in a statement that these "activities" do not comply with the EU's Markets in Financial Instruments Regulation (MiFIR) on the protection of investors and financial markets from harm.

In addition, the securities watchdog claimed that RoboMarkets was attempting to circumvent a section of the European Securities and Markets Authority's (ESMA) directive on product intervention through this approach. The intervention aims to protect investors from harm and prevent financial market instability.

In the view of CySEC, RoboMarket's offering of race tickets and branded merchandise appears to be a means of attracting customers to engage in CFDs trading. This derivative instrument allows investors to place bets on the future prices of underlying assets such as stocks or currencies, considered to carry a high level of risk.

At the same time, CySEC has also issued several other regulatory orders in recent months that affected FX brokers in the jurisdiction. Last month, it imposed fines of €100,000 and €50,000 on BDSwiss and Freedom Finance, respectively. Besides, CySEC reached a settlement agreement of €100,000 with BrokerCreditService (BCS) Cyprus to address the "possible violations" of EU's market abuse laws and Cyprus' market rules by the institutional broker and investment firm.

(Source: Finance Magnates)