The Cyprus Securities and Exchange Commission (CySEC) announced today (Thursday) its decision to impose an administrative penalty of €100,000 on BDSwiss Holding Ltd, the operator of forex and contracts for differences (CFDs) broker BDSwiss.

The monetary penalty was imposed due to non-compliance, primarily around the mandatory requirements of initial margin and risk warning during 2021.

CySEC Fines BDSwiss

The Cyprus Investment Firm (CIF) company enabled "offshore companies with which it was associated, to refer on the CIF's status, as a Cyprus Investment Firm, licensed by CySEC, to attract clients to whom they offered investment services in CFDs without requiring customers to pay initial margin protection [and] giving the necessary risk warning, as it would have [done], if the provider was the CIF, avoiding the application of the statutory requirement."

BDSwiss offers retail CFDs trading services with forex, shares, commodities, indices, and cryptocurrencies. Apart from the Cypriot entity, the broker is also authorized in Mauritius and Seychelles and mostly provides services under the offshore license to circumvent the harsh limitations of the European regulator.

According to CySEC's registry, BDSwiss gained its Cypriot license in 2013. Along with the BDSwiss brand, the Cypriot company offers trading services with two additional brands, Swissmarkets and Viverno. Finance Magnates reached out to BDSwiss for their response on CySEC's fine and will update the article accordingly.

A History of Regulatory Actions

BDSwiss Holding settled with CySEC, paying €150,000 for suspected violations of business conduct in 2017, and also paid an administrative fine of €5,000. Earlier, CySEC blacklisted multiple trading brands for falsely claiming to be associated with BDSwiss.

Regulatory actions against BDSwiss were not confirmed only to Cyprus. In 2021, the UK's Financial Conduct Authority (FCA) suspended BDSwiss Holding and all other entities under the BDSwiss Group from offering CFDs to UK investors for onboarding a great number of UK investors through overseas entities.

CySEC, which oversees all financial services companies operating from Cyprus, is actively taking action against non-compliance in the industry. Finance Magnates recently reported that the regulator is offering €140,000 to third-party contractors for investigating int CIFs.