Forex: Warnings by Government Agencies

Australia

Australia Securities & Investments Commission (ASIC)

Improving practices in the retail OTC derivatives sector

Recent ASIC activities have revealed practices in the retail over-the-counter (OTC) derivatives sector which fall short of our expectations. These practices include misleading marketing materials, unclear pricing methodologies, inadequate risk management practices, inadequate monitoring of counterparties, inappropriate referral arrangements.

Canada

Canadian Securities Administrators/Autorités canadiennes en valeurs mobilières (CSA/ACVM)

Forex Resources

Forex trading is generally regulated as trading in either a security or a derivative, and its regulation varies under applicable provincial and territorial securities and derivatives legislation. Under either of these categories, firms or individuals seeking to offer Forex trading services (be it by way of providing access to the market such as by acting as a broker or by providing advice with respect to trading, or both), must be appropriately registered in the province in which they intend to so act and must also be a member of the Investment Industry Regulatory Organization of Canada (IIROC) if they intend to offer forex trading services on margin.

Manitoba Securities Commission/La Commission des valeurs mobilières du Manitoba (MSC/CVM)

Major investment fraud derailed, but fraudsters changing tracks

We’re already seeing the people and companies behind Binary Options fraud changing tactics in some cases, diversifying into products like Forex and Contracts for Difference (CFDs).

European Union

European Securities and Markets Authority (ESMA)

Trading in foreign exchange (forex)

We have noticed an increase, in some European Union countries, in unauthorised firms offering transactions, or platforms to trade, in currency derivatives in the forex market (such as “contracts for difference” [CFDs], “FX forwards”, and “rolling spot contracts”). So, we are warning investors against dealing with unauthorised firms offering foreign exchange investment.

France

Autorité des marchés financiers (AMF)

The AMF warns of the dangers of forex market trading for individual investors

While online trading in the foreign currency market with regulated operators leads to losses for the majority of clients, individual investors must also be wary of fraudsters in the market. Numerous firms operate in France without the authorisations required to offer services to the public. The AMF receives many complaints from individual investors who have succumbed to enticing promises in numerous Internet advertisements. The serious façades of some websites are actually hiding frauds. Using impressive marketing, these firms take the money of clients who then find they have limited or no recourse due to the location of fraudsters, who are usually abroad.

United Kingdom

Financial Conduct Authority (FCA)

Forex trading scams

UK consumers are being increasingly targeted by unauthorised forex trading and brokerage firms offering the chance to trade in foreign exchange, contracts for difference, binary options and other commodities. They promise very high returns and guaranteed profits, either through a managed account where the firm makes trades on the investor’s behalf or by trading using the firm’s trading platform.

United States

U.S. Commodity Futures Trading Commission (CFTC)

Foreign Currency Trading (Forex) Fraud

The Forex market is volatile and carries substantial risks. It is not the place to put any money that you cannot afford to lose, such as retirement funds, as you can lose most or all it very quickly. The CFTC has witnessed a sharp rise in Forex trading scams in recent years and wants to advise you on how to identify potential fraud.

Fraud Advisory from the CFTC: Phony Futures and Options Websites

The CFTC has seen an increase in the number of Internet websites fraudulently promoting commodity trading systems and advisory services. These websites falsely claim, among other things, that advertised performance results are based on real trading when, in fact, the results are based on hypothetical trading. No trading system can guarantee profits! The CFTC urges you to be skeptical when promoters of trading systems and advisory services claim that their products and services will earn high profits with minimal risks. Always remember that whether or not a trading system is used, commodity futures and options are typically high-risk endeavors.