CySEC Imposes Fine on IC Markets for Leverage Violations

CySEC imposes a fine of €200K for IC Markets exceeding EU leverage limits; IC Markets plans to appeal the decision.

Key Points

• CySEC has fined IC Markets (EU) €200,000 for allegedly offering leverage up to 1000:1 through offshore entities, exceeding the EU’s 30:1 limit for Forex and CFD brokers.
• CySEC also emphasizes its commitment to enforcing leverage regulations to protect investors and ensure market integrity, citing the need for strict compliance.
• The broker denies the allegations, accusing CySEC of basing its decision on biased information from a former employee and vowing to appeal the fine.
• The fine highlights ongoing tensions between global leverage regulations. Furthermore, ESMA and Australian regulators impose similar caps to protect retail traders from high-risk positions.

The Cyprus Securities and Exchange Commission (CySEC) has fined IC Markets (EU) €200,000 for allegedly breaching EU leverage regulations. Additionally, CySEC claims IC Markets (EU) provided leverage up to 1000:1 by using offshore-regulated entities, exceeding the EU’s maximum leverage limit of 30:1 for Forex and CFD brokers.

CySEC’s announcement also states that IC Markets (EU) offered high leverage levels by channeling clients through offshore entities, violating EU regulations designed to protect investors. Dr. George Theocharides, the CySEC chairman, emphasized the regulator’s commitment to enforcing compliance and safeguarding investor interests.

CySEC Imposes Fine on IC Markets for Leverage Violations

“CySEC takes any misconduct by supervised entities seriously and is determined to bring non-compliant operations to a halt to enhance investor protection and the responsible growth of the investment sector,” Dr. Theocharides said.

IC Markets has vehemently denied the allegations and plans to appeal the fine. A company spokesperson criticized CySEC’s decision, arguing that it relied on unreliable information from a former employee the company dismissed for misconduct. The spokesperson claimed that CySEC based its decision on biased testimony rather than concrete evidence.

“The decision is based on flawed information and ignores irrefutable audited evidence,” the spokesperson said. “This raises serious questions about the fairness and integrity of the regulatory process.”

IC Markets, headquartered in Australia, is also regulated in Seychelles and the Bahamas, where higher leverage levels are permitted. The European Securities and Markets Authority (ESMA) imposed a 30:1 leverage cap for retail traders in 2018 to mitigate risks, and Australian regulators adopted similar restrictions in 2022.

CySEC’s fine underscores the regulator’s strict stance on compliance with leverage limits. The announcement highlighted that IC Markets had previously faced similar issues in 2021 and had promised corrective measures.

“In imposing the fine, CySEC considered the importance of ensuring full compliance with regulatory provisions,” the regulator stated. Industry observers and regulators will closely monitor the outcome of IC Markets’ appeal.

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