The fine breaks down into seven sections; €70.000 for providing investment advice without authorization; €10.000 for failing to maintain adequate controls for risk of failure; €10.000 for a weak internal operational manual; €40.000 for failing to act professionally in awarding trading bonuses to clients; €40.000 for providing misleading information to customers and potential clients; €15.000 for providing inaccurate information about nature of financial instruments to potential clients; €40.000 for failing to ask clients to provide adequate information.
This is not the first instance of XFR Financial running into issues with regulators. In July, 2016, the British Columbia Securities Commission issued a warning against XFR Financial for soliciting and opening accounts for Canadians on its Forex platform, xforex.com:
“Although XFR Financial Ltd. is registered with the Cyprus Securities and Exchange Commission, the Parties are not registered to trade in, or advise on, securities or exchange contracts in BC.”XFR Financial’s Australian FX subsidiary, XTrade.au Pty Ltd, also ran into problems in July with the Australian Securities & Investment Commission, which took issue with the way XTrade was handling payments processes.
The CySEC stated that this is XFR Financial's first offense and that the company has taken the necessary corrections to come into full compliance with the law.