The EU’s leading regulator CySEC has been making waves across the binary industry in recent months, by cracking down on brokers harder than ever with an updated set of regulations issued in a circular released in November 2016.
4 months later, CySEC has published a follow-up to Circular C168, in order to provide ‘additional guidance on the types of bonus incentives not permissible to be offered to retail clients by Cyprus Investment Firms’.
In this new circular, CySEC highlighted the specific types of bonuses that are prohibited by the regulator including the following; welcome/deposit bonus, volume bonus, refer a friend scheme, tournaments/competitions, cash rebates, risk-free accounts and interest rates. Any form of cash gifted to clients that is subject to turnover requirements is not allowed.
The circular also pointed out the fact that CIFs may opt to reward their clients in other ways, by for example offering them lower spreads instead of bonuses. This kind of non-cash incentive would not be considered as a violation of the regulator’s laws.
CySEC has reiterated that it holds consumers interests as a top priority and plans to closely observe that all investment firms under its supervision will abide by the compliance requirements outlined it its circulars. It also elaborated that it will not refrain from taking the appropriate action in case of any breaches of these regulations.