RoboMarkets, a forex and contracts for difference (CFDs) broker regulated by the Cyprus Securities and Exchange Commission (CySEC), has been prohibited by the securities regulator from offering non-monetary rewards such as race tickets and “branded merchandise” to its retail customers. CySEC announced the decision today (Wednesday), noting that its Board reached the decision earlier in March.

CySEC Tackles Non-Monetary Rewards

According to the Cypriot financial watchdog, RoboMarkets through its website and social media platforms offered such non-monetary rewards to its customers. However, these 'activities' do not comply with the provisions of the European Union’s Markets in Financial Instruments Regulation (MiFIR) on protecting investors and the financial markets from harm, CySEC noted in a statement.

Furthermore, the regulator claimed that RoboMarkets through the practice sought to circumvent a section of the European Securities and Markets Authority's (ESMA) directive on product intervention. The intervention seeks to protect investors against harm and prevent the destabilization of the financial market.

It appears that the Cypriot regulator sees RoboMarket’s offering of race tickets and branded merchandise as a technique to entice customers to trade CFDs. The derivative instruments, which allow investors to bet on future prices of underlying assets, such as stock or currency, are considered highly risky.

As of press time, RoboMarkets has not responded to Finance Magnates’ request for a comment on the order.

CySEC Maintains Watch over Cyprus’ Financial Markets

Meanwhile, CySEC in recent months issued several other regulatory orders affecting forex brokers in the jurisdiction. Last month, it slammed a fine of €100,000 and €50,000 on BDSwiss and Freedom Finance. In addition, the regulator reached a €100,000 settlement with BrokerCreditService (BCS) Cyprus to resolve the institutional broker and investment firm’s 'possible violations' of the EU’s market abuse laws and Cyprus’ market rules.

Earlier in May, CySEC announced plans to conduct on-site visits and desk-based reviews of regulated companies offering investment services to retail clients in the island country. The Commission noted that the visits will be conducted on a sample of Cyprus Investment Firms (CIFs) during the second half of this year.

“This action will allow CySEC to assess how the CIFs apply the MiFID II requirements on marketing communications, and it will also enhance the protection of investors in line with ESMA's objectives," CySEC explained.

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