CySEC Fines BDSwiss With 100,000 Euro Penalty

The Cyprus Securities and Exchange Commission (CySEC) has recently imposed a 100,000 euro administrative penalty on BDSwiss Holding Ltd, the forex brokerage and contracts for difference (CFD) operator operating under the BDSwiss brand. This regulatory action was initiated in response to BDSwiss redirecting customers to an unregulated offshore entity.

CySEC's decision is based on their findings that BDSwiss violated Article 42, paragraph 5 of DI87-09 Regulation (EU) 600/2014. The penalty is a results from BDSwiss's infringements related to the financial service offerings that failed to include mandatory provisions for initial margin protection and risk warnings, as stipulated in the terms.

CySEC explicitly points out that BDSwiss Holding Ltd has leveraged its status as a Cypriot Investment Firm (CIF) to facilitate offshore entities, attracting clients to other CFD investment service providers without adhering to the requisite initial margin protection and risk warning protocols. Consequently, this broker has managed to circumvent the legal requirements established by CIF regulators.

CySEC states, "BDSwiss Group relies on the regulatory status of one of its entities in the UK to lend an air of legitimacy to the entire group."

The investigation revealed that 99% of BDSwiss customers in the UK opted for a group entity that lacked clear regulatory guidelines.