IC Markets Challenges CySEC’s €200,000 Fine

IC Markets (EU) Ltd has announced plans to appeal a €200,000 fine imposed by the Cyprus Securities and Exchange Commission (CySEC). The fine pertains to allegations that the broker breached EU financial regulations concerning the marketing, distribution, and sale of Contracts for Differences (CFDs) to retail clients.

In a robust response, IC Markets argued that CySEC overlooked “irrefutable audited evidence” and relied on information provided by a former employee dismissed for misconduct. IC Markets claimed this ex-employee threatened the company with regulatory repercussions, alleging connections within CySEC. The broker asserts that CySEC's decision is based on assumptions and speculation, rather than solid evidence, challenging the fairness and integrity of the regulatory process.

According to IC Markets, CySEC's reliance on biased testimony while ignoring undeniable evidence suggests a pattern of selective and disproportionate application of regulatory authority, which they believe endangers transparency, market integrity, and fair competition.

The fine from CySEC relates to IC Markets' alleged failure to comply with article 42 of Regulation (EU) No. 600/2014, which governs markets in financial instruments. The broker is accused of engaging in activities that circumvented the requirements of paragraph 4(1)(a) of Directive DI87-09, which restricts the marketing, distribution, and sale of CFDs to retail clients, especially concerning initial margin protection.

The main allegation is that IC Markets offered a leverage ratio of up to 1:1000 through an offshore entity within the same group, bypassing the legal limit of 1:30. CySEC noted that IC Markets had committed a similar infraction in 2021 and had not implemented the promised corrective measures.

CySEC stated that the company engaged in actions aimed at circumventing the restrictive measures enacted to protect investors. The regulator decided to impose the fine during a meeting held on July 1, 2024, reflecting ongoing concerns about the broker's adherence to EU financial regulations.

IC Markets vehemently disputes CySEC's findings and has committed to appealing the fine. The broker contends that the regulatory decision is erroneous and pledges to pursue all available channels to overturn the penalty.

As this issue develops, it underscores significant concerns about the regulatory framework for financial instruments in the EU and the mechanisms designed to uphold market integrity and protect investors. The outcome of IC Markets' appeal will be closely monitored by industry participants and could have far-reaching consequences for the enforcement of financial regulations within the region.