CySEC : new circular on the use of affiliates
The Cyprus Securities and Exchange Commission (CySEC) has issued a new circular that focuses on the use of affiliates. The text stipulates that the investment firms being regulated (primarily, brokers Forex, CFD and binary Options) are required to supervise their partners that target the end customer.
Over the past two years, the CySEC has amended or even suspended the licenses of some brokers, due to the measures taken by a third party “affiliates” to the account of brokers. Affiliates sometimes have techniques of marketing which are more aggressive than the brokers themselves. Some are able to say almost anything to attract customers.
According to the announcement, the companies of investment of Cyprus (CIF) will need to ensure that their affiliate partners using the marketing materials as appropriate. In the case of non-compliance with laws, brokers will have to notify the CySEC, and provide the website address of the affiliate and its identity.
In addition to describing the rules that govern the relationship between the brokers and the affiliates, the CySEC has also stated its intention to publish on its website a list of web sites of affiliates that do not comply with the laws. The brokers will be informed of this malpractice and will have to stop and / or avoid any cooperation with these affiliates.
Click here to read the circular (PDF in English)