New Zealand FMA warns against TradeFintech firm

The Financial Markets Authority (FMA) of New Zealand, the government agency responsible for financial regulation, have issued a warning against FX broker Trade Fintech. According to the statement, the regulator is concerned that TradeFintech may be operating a scam and accordingly advises New Zealand residents to exercise caution before dealing with them.

The Financial Markets Authority (FMA) plays a critical role in regulating capital markets and financial services in New Zealand. It is the New Zealand government agency responsible for enforcing securities, financial reporting, and company law as they apply to financial services and securities markets.

TradeFintech offers trading Forex and CFD and operates through the website www.tradefintech.com. Our main concern about the broker is the confusing information provided on the website, which doesn’t add much trust to it. The terms and conditions have two similar statements, the first one is that the company is operated by S.O. Strategic Partnership, based in Scotland, UK. The second statement is the broker is owned and operated by Fintech Technologies, located in the Marshall Island. Those brokers registered offshore are not considered as reliable ones, because they are basically are not overseen by any authority.

In addition, the UK’s Financial Conduct Authority has warned against TradeFintech in September 2018 and the broker has way too many negative reviews and obviously cannot be trusted. We always advise traders to avoid dealing with unregulated offshore-based forex brokers like TradeFintech, as most of them are involved in investment scams. There are a number of properly licensed brokers to choose from, like the ones regulated by the Financial Conduct Authority or the Australian Securities and Investment Commission. You can read our review on this broker here.

Portugal’s CMVM warns against a forex broker Trader.Online


Portuguese Securities Market Commission (CMVM) has added one more unregulated forex broker to its warning list last week. The regulator issued a formal warning against Trader.Online as the broker is not authorised to carry out any type of financial intermediation activity in Portugal.
The Portuguese Securities Market Commission, also known by its initials as “CMVM”, supervises and regulates securities and other financial instruments and activities of all those who operate within said markets. It is also CMVM’s mission to ensure the stability of the financial markets, by contributing to identify and prevent systemic risk and contribute to the development of financial instruments markets.


Trader.Online is operated by IVY Capital, an offshore company registered on the Marshal Islands, and is not authorized to offer forex and CFD trades in Portugal. Besides Forex Trader.Online also offers CFDs trading on commodities, stock, indices and crypto coins. There is one more company behind the brand’s name, DDK Ltd. that claims to be registered in Bulgaria. However, the company is not licensed by Bulgarian Financial Supervision Commission.
We have also found a lot of negative reviews from the traders. Some of them cannot withdraw their funds and profits, others haven’t heard from broker since their first deposit. It seems that Trader.Online is just one more unregulated company trying to deceive customers.
Generally, we always advise traders to avoid dealing with unregulated forex brokers, as most of them are involved in investment scams. There are a number of properly licensed brokers to choose from, like the ones regulated by the FCA or the Australian Securities and Investment Commission.
You can read our review on this broker here.

Forex Trading: Why Trade with Dubai DFSA Regulated Brokers

DFSA Regulator

Formed: 2004
Jurisdiction: Dubai International Financial Centre (DIFC)
Headquarters: Dubai, United Arab Emirates
Website: www.dfsa.ae

Regulated activities:

  • Credit and banking services
  • Collective investment firms
  • Asset management
  • International commodities derivatives exchange
  • Commodities futures trading
  • Securities
  • Islamic finance
  • Trust and custody services
  • Insurance
  • International equities exchange

Introduction

The Dubai Financial Services Authority (DFSA) is the independent financial regulatory agency that was created simultaneously along with establishing the special economic zone DIFC Dubai International Financial Centre, in Dubai, United Arab Emirates. This specific area was created back in 2004, with a purpose to enable specific conditions where the economy and finance with its own civil and commercial laws will develop throughout its global nature and act as a business hub for the Middle East. As the Middle East is known for its conservative approach to business and generally the way of governance, it was a need to create an area where numerous Sharia laws will be followed, yet will allow global firms and entrepreneurs to set the base of international business in the area. Indeed, the approach was a great move that showed for last decades fastest growing indicators with a boom of economic by itself and Dubai utmost development at almost any aspect. Dubai as being distinct from the UAE’s which falls also under federal Securities and Commodities Authority that covers regulation of the whole UAE economy. However, the DFSA provides a regulatory environment of international standards in DIFC zone specifically.

The DFSA’s regulatory providing a financial service authorization and is a must for financial firm established or that carries out activities in the DIFC. This includes Banks, Brokers and Trading Dealers, Asset Managers, Wealth Managers, Corporate Financiers, Insurances, etc. The financial company established in the DIFC allowed to have foreign ownership and is subject to a civil, commercial and regulatory environment that is similar to the United Kingdom legislation. The DFSA operates a regime similar to the MiFID, whilst the protective tools enable market participants to engage in a Professionals market or allow a retail endorsement to undertake retail business or trading.

Why trade with a DFSA regulated broker?

There are no doubts about Dubai influence and importance in the financial world, which acts as a huge financial center and serves some of the wealthiest traders, investors and businessmen. Being a center of the Middle East economically, Dubai is an Islamic State where the Sharia laws are applicable to even business models or money management. Indeed, Sharia laws are quite different and strict at many points, however, Dubai allowed some progress, which was not available before. The foreign ownership of the company enables operation in Dubai throughout low taxes and utmost possibilities, while in fact, companies can establish business with very small government interference.

So what does that mean for Forex Brokers? As the Dubai opened their doors to many international investors with an opportunity to perform a business, as well as giving access to some of the world reaches investors, vast of brokerages opened their branches or empowered their firms in jurisdictions. However, there were many of the companies that didn’t bother to obtain a necessary regulatory status and to be a truly Dubai authorized broker, therefore deliver a trading environment in a way they see it right. Thus, it is possible for brokers to set up a brokerage in Dubai without being regulated by the DFSA. Of course, that involves a significant risk to fall under the fraudulent or scam operation, which unfortunately the Middle East and Dubai in particular still known for. While the question about trust comes up, as the Dubai and Middle East population is a relatively new participant in investment and financial trading, the unscrupulous brokers try their attempt to attract reach, yet naïve investors, by a “lucrative offering” and basically steal their money.

In reverse, DFSA mission is to protect all participated parties that act in financial trading in Dubai and to enable fraudulent free and transparent practice, thus the certain degree of safety can be guaranteed only by the authorized brokerages. Basically, the DFSA license is a guarantee to the investors that the company comply with the strict regulations and constantly checked on in terms of their service delivery.

So let’s see what are the requirements of the companies in order to become a legal, authorized DFSA company, as the authority attempts reverse towards professionalism and efficiency of the trading environment. Under the law, the DFSA has power to govern activities and general behavior of market participants and brokers in particular. At the very beginning of its history and DFSA regulation of the market, there were mainly professional clients, which affected on a list of requirements and the model the authority operates. While further, the capacity of retail investors increased rapidly on a yearly basis, the DFSA made vast of changes to adapt the regulation to current and the most sufficient manner. Therefore, the requirement included more than $1 million in liquid assets and not involve the local currency the UAE Dirham. In case the company directs its service to retail clients it demands additional endorsements with the details forwarded to resolve clear offering to ensure respective proposal, throughout the honest competition and applied restrictions on marketing or misrepresenting of facts in any way.

Of course, this high requirement was not met positively by the brokers, thus most of the brokerages operated illegally, with no authorization. However, since the authority recognized the risks and growth of retail offering or demand, the DFSA centered new requirements and included additional measures and controls. Recently, application fee varies depending on the financial service and ranging from $15-17,000, while the accreditation process will check on the essential level of the staff and top management accreditation and professionalism. In addition, the strictest compliance related to the broker’s money management, while the company should strictly segregate clients’ funds and provide risk disclosure statements with respected regulatory supervision.

The DFSA regulation has much in common with the US regulation with a principal of the NFA and CFTC, which made DFSA work closely to international jurisdictions. In addition, the broker may choose between the regulatory guidelines adopted by the UK, US or Cyprus. However, DFSA still reserved any trading restrictions, which includes SWAP account for Islamic traders that is designed according to Sharia laws, and a higher minimum margin requirement that is set between 2-5% and accordingly lowering possible leverage. Furthermore, the regulated broker should provide regular reports on audit and performance, a track of the transactions and ensure the flow of the DFSA guidelines. Otherwise, the company may receive impose of fines, face penalties or be even dismissed.

Consequently, the facts of the applied regulations and requirements indeed confirm DFSA sharp references, yet in order to improve their service and the position of the Dubai and Middle East in trading and financial markets, DFSA makes their truly hard efforts to make things better. In 2017, the DFSA conducted a review of subjects concerning financial crimes, with a purpose to improve certain areas of financial trading improvement as the authority identified objectives to risk-based assessments. The DFSA findings reviewed and divert to lack of supporting analysis and money laundering financial risks, application of adequate systems and controls of transaction monitoring, placement of more strict policies and procedures with clients, etc. In light of the disclosure, the DFSA point to introduce a number of actions and focus more on financial compliance according to the international standards. Therefore, the regulator tends to check on the implementation of processes, regular involvement in development, maintain supportive development of internal procedures, along with the constant improvement of requirements and supplement of amendments to supply.

In addition to that, the recent updates show that Dubai authority entered into an agreement with the Singapore MAS (Monetary Authority of Singapore) to frame cooperation and develop an environment to sustainable development of financial services throughout technology. The agreement is going to deploy the growth of innovation and FinTech firm’s application towards their global extend between the two markets and further. In simple words, that means that the cooperation mechanism will refer businesses between the functions of markets, increase application of latest technologies like digital payments, blockchain and flexible platforms. The general trend shows that international authorities of respected markets and jurisdictions engage more into cooperation and associated planning with a purpose to improve overall financial stability and integrity between the markets. The collaboration permits a long relationship between the parties, providing an extended basis of protective tools and measures towards investors or traders and promises further improvement of service.

Read more about DFSA and MAS agreement: https://www.dfsa.ae/MediaRelease/News/DFSA-and-Monetary-Authority-of-Singapore-Sign-FinT

DFSA Customer Support Service:

The DFSA regulated brokers surely do have a procedure to resolve disputes with clients, yet investor able to go further and submit a complaint. With all regulatory guidelines, if a trader or investor believes in unfair trading experience with the broker, or reach out the fraudulent activity, violation of the laws they can file a complaint directly to the DFSA. The trader should describe what has accrued, provide evidence of events, attach documents if applicable and include details of the situation or another, while DFSA will investigate the case further.

Submit the complaint about DFSA broker or company: https://www.dfsa.ae/Consumer/Complaints

DFSA also gives direct input to the traders through the official website and served sources, to promote understanding of the financial market and necessity of regulation, with an aim to maintain confidence in the DIFC industry. The permanent support of DFSA allows to check-on the latest regulatory news, understand the basics of investing, provides guidelines on how to avoid frauds, as well as gives advice in order to resolve complaints or disputes.

The traders can also contact authority directly to verify or consult on supervised firm, as well to receive an answer to an appeared question. The DFSA online form: https://www.dfsa.ae/Contact-us/Supervised-Firm

List of Regulated Forex Brokers

As the fraudulent activity of forex brokerages and investment firms in Dubai still remains at the high level, the potential investor should stay attentive to common scam signals alike unfamiliar calls with incredible opportunities or complex investment as well not to trust in everything said. And of course to avoid by any mean unlicensed or unregulated brokers.

In order to check on the company or another, which is the necessary step, the DFSA online listing carefully appears the forex broker license details and information, which is available on the DFSA Public Register.

In general, DFSA oversees over 600 entities and authorized hundreds of brokers, while also is responsible to regulate financial and ancillary services, supervise and enforce anti-money laundering (AML) and counter-terrorist financing (CTF) requirements applicable in the DIFC.          

In order to choose on the best broker or to check the company, you should also read DFSA Brokers Reviews and get updated information from the engaged traders and other participants. For instance, our website designed to assist in market data includes hundreds and growing of Regulated Brokers Reviews along with Brokers to Avoid, and other useful data.

Conclusion

As the Dubai investors face some problems and fall victims of numerous frauds due to a possibility to enable brokerage firms without DFSA regulator, it is hardly advised to choose only those firms that hold necessary operation license and are authorized. Important to mention, the issues appeared only with non-regulated firms operating in Dubai.

As Dubai Financial Services Authority ensures highest quality services to the customers through its strict regulation and constant, very promising improvement, high liquidity proposal, software quality and reliability, safety data and banking, as well as customer care standards. At instance the protection by the applicable laws usually available only with the DFSA regulated brokers. Therefore, DFSA truly helps Dubai and Middle East markets to progress in the industry and make the necessary steps in order to facilitate strong position and a transparent possibility of the international offering towards investors and traders.

Bank of Russia Licensing FX Brokers

Bank of Russia Licensing FX Brokers

In general condition, the Russian market operates through its strict centralized nature and governmental influence on its development. Since the Forex industry gained its popularity and spread to a Russian market as well, the majority of offered trading services was managed through offshore brokers. The industry players maximum participated to Russian self-regulatory organization CRFIN, yet it was never a broker’s obligation to enter.

In addition, earlier in 2015, the first deputy head of the Central Bank compared the forex market to a casino and said that the regulator is not interested in the onward development of such companies in Russia.

However, starting from 1 January 2016 Forex brokers that operated in Russia were required to get a license from a Bank of Russia, as the government understood the necessity of regulation. This statement affects a number of brokerages that expressed concerns about their legal operation in Russia from now on. The board director of CRFIN mentions that the new law will protect forex brokers and prevent fraudulent entities, as well as set active clients’ interest towards investment with a reliable broker. Years of non-licensed brokerage activity finally got an implementation of a regulatory regime.

The application of the companies towards their license receiving appealed actively by the largest brokerages, as the companies welcomed the development of a regulated environment in Russia. Back in 2016, when forex brokers were about to receive professional licenses in the securities market, the first firms Alpari and Forex Club were named as the largest players in Russia, while the first firm was Finam investment holding.

Among required obligations and new laws toward Forex Brokers, the Bank of Russia set a capital minimum amount of RUB 100 million ($1.5 million), high qualification criteria, strictest supervision of operation along with a necessary requirement towards top management of the company and its staff members. The companies are also obliged to pool funds into a compensation fund with a purpose to reimburse clients in case of broker’s insolvency. In addition to these requirements, earlier this year 2018, the authority updated its statements and requirements towards Forex leverage limitations and looks forward to setting up a maximum level of 30:1 and allow trading strictly on forex related products. That step was a quite logic due to a recent introduction of a leverage cap by European authorities and amendment of the trading offer accordingly. 

However, the members of Forex organization operating in Russia were rather disappointed, as typically assets offering to diversify its exposure to the volatility of various classes and a much higher level of leverage. In fact, until now Bank of Russia did not issue or register a large number of licenses, as this may take place as a general Russian conservative opinion about forex industry or just a consequence of a better offshore establish proposal in Russia. Since the beginning and until now there were only nine brokers which obtained its legal licenses of forex dealers from a Russian central bank.

The opinion of experts mentions that in fact, the Russian forex brokering is a very specific case, since the Central Bank did regulate brokers until now, gave its permission to operate, yet the companies found their way out to maintain “better process” in their own interest. As the licensed companies are mainly international holdings with numerous subsidiaries, the majority of trading accounts indeed were opened with offshore entities, while Russian jurisdiction branches took a responsibility mainly on advertising. The purpose of these is to attract new clients and ensure constant influx, while the account management goes through an offshore specification. The regulatory reports that brokers submit were consistent of performance data, while the initially small number of accounts were operated throughout Russian entity and hiding its real nature.

In conclusion, it came to the point that the latest breaking news just before the end of 2018, appeared to revoke of five licenses, of the largest forex companies operating in Russia and providing clients to markets and trading. As the Central Bank reporting, the reason for the decision was that these companies repeatedly violated regulations and legislation of the Russian Federation. (Read on more about 5 licenses annulation by the link).

The representatives of revoked companies were surprised by the Central Bank action, as the brokerages just a day before participate into summit where the trading markets were discussed too and nothing showed a potential of regulatory increase. Therefore, Russian trading industry does not know what to expect next, however, it’s obvious that the latest actions and plans show that the Bank of Russia made it seriously to clean up the market and develop further trading offering in a more trustful, sharply regulated way.

The current increase of regulation and revoke of licenses that brokers were definitely not ready to face, will affect the operation of brokers in Russian markets, their development and specifically the legal side of service delivery in Russia itself. Russian economy had always shown its centralized way of operation, and recent action towards the relatively young Forex Russian market will act on a better way towards the traders, as these steps mean a serious claim to enable clear and well-regulated operation of Brokerages in Russia. 

What is more, the last official permit was received by an Alfa Forex company just a week ago in December 2018. The broker previously accepted Russian clients throughout its Cyprus subsidiary Alfa Capital Holdings Cyprus Limited and has a long history of operating in Russia itself. The newly licensed Russia broker mentioned that the company applied for its license in May, and already by December became an official member of the Association of Forex Dealers. This act confirms Bank of Russia concerns and forward look on trading development and regulation of the Forex offering within Russia territory, as well as a growing potential. Yet, from now on Russia strongly welcomes only those companies that deliver clear and transparent brokerage operation throughout compliance with Bank of Russia regulation. 

Forex Trading: Why Trade with German BaFin Regulated Brokers

BaFin Regulator

Formed: 1 May 2002

Jurisdiction: Federal Republic of Germany

Headquarters: Bonn and Frankfurt am Main, Germany

Website: www.bafin.de

BaFIN is responsible for administering the following pieces of legislation:

  • corporate governance
  • financial services
  • banking sector
  • securities and derivatives (category including Forex & CFD trading)
  • insurance
  • consumer protection
  • financial literacy

Introduction

Bundesanstalt für Finanzdienstleistungsaufsicht or the Federal Financial Supervisory Authority, more known as a BaFIN, is the financial regulatory authority in Germany that acts as independent federal institutions under the supervision of the Federal Ministry of Finance Germany. The authority was merged by the German Federal Bank along with the insurance and securities regulatory agencies and supervision. BaFIN holds a responsibility to supervise and regulated financial sector in Germany, with a purpose to maintain smooth operation and harmonized offering. The regulatory role falls in effects law enforcement towards banks, financial services institutions, insurance undertakings, and securities or derivatives brokers.

Perhaps, BaFIN is one of the largest and most valuable European regulators due to the fact of German economic and financial positions, as well as a large number of financial market firms that operate in the region. There are no doubts about the BaFIN role in the financial trading sector, since the extensive regulation regarding leveraged products, Forex and CFD trading came up together with the growth of trading offer, and followed the previous strictest development of stringent rules towards financial firms.

Moreover, BaFIN constantly develops its powers, as of since 2016 a new launch dedicated to encourage more businesses and exposes misconducts. The major role of BaFIN ensures integrity and transparency of the German financial investment offering, along with its charge of the constant solvency and payment obligations of the regulated institutions and capability to deliver confidence of services to their clients or traders. That means, BaFIN continuously check on the service providers and market participant in the sector and assures its strongest position on the international scale.

https://www.bafin.de/EN/DieBaFin/AufgabenGeschichte/aufgabengeschichte_node_en.html

Why trade with a BaFIN regulated broker?

As BaFin operates in the public interest, its primary objective is to ensure that financial system is properly functioning and delivers stability and trust towards investors or traders. The supervision of securities, CFDs and Forex consistent of integration and protection of offering and controlled on a legal basis throughout the Securities Trading Act (WpHG), the Securities Acquision and Takeover Act (WpUG), the Securities Prospectus Act (WpPg) and the Prospectus Act (VerkProspG).

In addition, the provisions of the Stock Exchanges pricing process monitored by the authority in collaboration with the exchanges own trading surveillance units. In simple words, that means that BaFin as a Germany authority does not only register or regulated financial market participants, but also supervise exchange-like trading systems and subject cooperation to fulfill the functions at the international level.

From the application of license, until the company officially obtains its registration, the firm will pass through a serious check of the performance, its maintenance of sustainability and trust, while their shareholders are required to check also, along to a large number of control systems. In fact, it is not easy to become a regulated BaFin broker and meet the necessary requirements, as minimum requirements should be sharply achieved, otherwise the company will be suspended. The minimum capital requirement dependent on the type of the financial company and averaged between 50,000€ up to 730,000€. While the system disciplines numerous details for the company to maintain, overall the minimum capital of an investment company which trades on its own account should be not less than 125,000€.

The broker also checked for its adequacy, should submit a business plan, acknowledge and practice essential experience, apply protection systems and have at least one year of risk control with a record of at least 6 years. The directors and top management are interviewed in terms of their qualifications, so BaFin can rest assured the company sustainability is protected by the smart management and experience to run successful brokerage as well. 

After its registration process the broker, as established and regulated in EU, the company will automatically comply according to respective ESMA regulation, due to an EU directive. The broker received a regulated status maintains a physical office in Germany and organized to comply its mandates at all times.

The Federal Chamber establishes special guidelines for regulated members and particularly interpret an operational standard that enables safety and transparent measures towards traders. The list of major regulates includes segregation of the client’s funds from the company operational ones at all time and enabled negative balance protection. This assures that the trader’s funds are safe and not reachable by the company, as well as that volatility market conditions won’t affect trader’s account into a loss of balance more than the initial invested capital. As a general mean, the regulator acts and enables new rules and controls according to the new developments and findings, therefore current issues following numerous rules towards Cryptotrading and leverage restrictions, while the needs are not to be between 2:1 and 30:1.

Moreover, with a purpose to protect consumer rights, which is among the top responsibilities of BaFin, the authority serves the Consumer Advisory Council that analysis information about the financial markets and prevent broker’s manipulations. The BaFin broker submitting reports on a periodic basis, submit information on company orders, lending and all forms of assets along to disclosure reports. The required regulation allows BaFIN to request operational information, conduct supervisory or analysis at any time, while in case regulated broker does not comply with necessary standards this may cost a backwash.

In the past German authority has hardly made use of enforcement, however recently BaFIN is an effect to initiate legal action, when it discovers suspicion a crime, including market manipulation, illegal action, insider trading or establish of fraud. The further actions include the creation of working group together with a professional to define objectives, publication of found information to the public, impose of fines and heavy penalties, and even raise of a criminal complaint against persons or companies. In addition, BaFIN has the power to ban a product or dealer offer, remove the directors, suspend shareholders and appoint outside supervision.

Overall, throughout the strict regulatory guidelines, the trader and investor is protected at any stage or scenario from the account opening, trading process, up to the unlikely events of the broker’s insolvency. BaFIN is responsible for statutory compensation and guarantee scheme plan, which is mandatory to join with a purpose to protect customers’ deposits. The mechanism clarified compensation up to 100,000€ which any client is entitled to receive.

Regulatory Complaint

As a part of the customer protective service, any trader or investor can file a complaint against the broker if the one faces unfair experience with a particular company. Apart from an applied resolve procedure, which every regulated BaFin broker applied to and you should first refer to the company itself, the trader can submit a complaint in writing with the necessary details and proves of claims to BaFin. The information will be reviewed for evidence, while further the stated company will be contacted for detailed explanation and treatment plan. Regardless the outcome, BaFin will give final notice to the client, in case it can resolve an issue or not, since securities investment complaints are a special character and BaFin has not right to support with claims. BaFin can only take action against supervised companies and check on their compliance to the agreed contractual terms and legal requirements.

If you having problems with a bank, an insurance undertaking or a German management company (Kapitalverwaltungsgesellschaft – KVG), the BaFin may respond by suggesting an out-of-court settlement of the dispute or Ombudsman Services company.

Submit the complaint about BaFin broker: https://www.bafin.de/EN/Verbraucher/BeschwerdenAnsprechpartner/Ansprechpartner/BaFin/bafin_node_en.html

Submit the complaint to Financial Ombudsman services:

https://www.bafin.de/EN/Verbraucher/BeschwerdenAnsprechpartner/Ansprechpartner/Finanzombudsstellen/finanzombudsstellen_node_en.html

In addition, BaFin educates population through its comprehensive information that is available to all. You may find out about financial issues, a wealth of information about banks, insurance undertakings, and other financial services providers. BaFin also answers frequently asked questions in case there are difficulties with a company or you can find out who to contact to receive advice.

BaFin consumer organizations service: https://www.bafin.de/EN/Verbraucher/verbraucher_node_en.html

List of Regulated Forex Brokers

In order to help traders to verify information about BaFin forex broker license, the authority’s official website publishes a list of regulated entities with constant updates. In addition, the regulated by BaFin broker will display on the footer of its website or regulation page its BaFin license number, which is available to check through official sources.

In addition, it is advised for any trader or investor check on BaFin Broker Reviews with updates and recent news from the broker. Currently, Germany regulated brokers’ list at our website includes 50 BaFin Regulated Brokers and growing, check on Regulated entities the link.

Conclusion:

The benefits of trading with the BaFin regulated Forex Brokers are obvious, as the authority enabled the strictest insurance of strong broker’s responds, responsibilities, and compliance to its high solvency standards. monitoring products, and other issues along with the compensation when necessary. Overall, the BaFin made it scrupulously to monitor regulated brokers and smooth operation of the Germany finance system as an important part of international turnover. The German brokerages are computable to the successful prospective of operation, makes its utmost to develop a market and focus on fair treatment of their client. For this reason, BaFin gained its high consumers’ rankings, as well as popularity to establish brokerage, particularly under the BaFin regulatory status.

Binary Option Scams

What is Binary Option and how to trade them?

Find out who are Binary Options Scams, how they work and how to avoid falling into a trap?

While the main aim of scammers is to get clients funds or personal details, everyone likely to fall under unlikely actions of scams, that is why you should know how to protect yourself and spot fake offering.

Introduction into Binary Trading

Binary Options is a financial instrument in which trading is performed by a fixed amount of cash and time. Options trading allows investors to buy a stock or other investment, or bet set to an underlying asset above a certain price with a particular expiry date. The potential loss or gain is limited to the difference between the market price and the option price itself. In binary option case the set amount of time is much shorter and in fact, is a short-term bet on the asset direction. The Means, if the trader’s guess is right, you get set amount of money from the other, while in case of opposite “guess” or if you are wrong you lose it all.

Since the binary and options trading appeared as an attractive offering among financial investments, the whole business got involved in its discussion of trustworthy operation or not. Its popularity explained by open access to anyone who seeking for an investment opportunity and allegedly allows to enjoy high incomes in a very short time. Yet, let us look closer to the opportunity itself.

How Forex Trading scam work

The binary brokers as a typical mean locate their offices primarily in offshore zones and other jurisdictions that did not imply the strictest regulation to financial investment firms. Therefore, the company will enable their operation with a very low requirement and capitals while as a general rule will claim its presence in prestigious jurisdiction alike UK, Hong Kong, US or another European country. The phone number may appear to be a local line, but eventually to have the end user in the option trading hub somewhere in the world. Therefore, binary scam gear towards investors and promote fake binary trading software through easy for unscrupulous providers to take the advance.

Most often binary frauds use heavy advertising tactics through a social media, advertising on websites and emails with a redirection to a very-well developed websites with an allegedly professional offering and a very attractive opportunity of gains available to everyone. The majority of binary option scams lure traders with a very small initial deposit and “free bonuses”, and most often it is enough to get interested in. Further on an options broker will ask for credit card information and eventually, that’s where the positive side finishes. Then, the trader puts his life savings into “potential investment and gains”, but faces the loss of everything. The attempts to get money back turns out to be unsuccessful with further stress from understanding what happened.

The main trap in binary options trading is that firm may easily manipulate software and distort price which will lead to sudden loss of the trading account and balance. Furthermore, the scam brokers may use credit information to withdraw funds from the cards, therefore you should be extremely cautious about giving the credit details.

As the nature of Binary Options trading allows company providers to operate the “business” easily as well to enjoy high incomes to their pockets, the industry shows its growing tendency constantly. However, the situation has now changed due to better regulations and observance that keeps track on scams. Securities and markets regulators across international jurisdictions received thousands of complaints as the binary options providers’ target investors aggressively, yet, the truth of victims is far beyond the received number of complaints. While Binary Option is often categorized as a sort of gambling by the authorities the binary options broker may be a registered firm in particular or offshore place, yet the firm is not allowed to sell its offering to residents of other jurisdictions.

The authorities and international trading industry regulators regularly check on the trends and actions performed or offered by various brokers with a purpose to protect clients and maintain a trustable or smooth market operation. In regards to binary options trading sites, the most trusted regulators issued an Investor Alert, with an advice not to involve in binary trading at all and even banned binary options to retail traders. The agencies mention that numerous complaints received and relatively easy way to manipulate software or to generate losing trades during the binary options trading delivery involves significant risk to be involved in fraudulent activity. The authorities then identified thefts through a fixed-odds betting nature of the binary options trading and try to educate the population and warn about fraudulent promotional schemes.

In 2013 US regulators CFTC and SEC officially joined and published an alert to investors along with a ban on binary options trading to the residents. The Canadian authority mentions binary option fraud is a leading investment fraud that facing potential investors, while there are no registered firms permitted to trade these products in Canada. The European ESMA along with the respected EU authorities followed by series of warnings and from 2 July 2018 banned firms from selling binary options across the EU. While the ban is for a three month period, a further extend took place from 2 October and continues.

Check on UK FCA warning against Binary Options Scams: https://www.fca.org.uk/scamsmart/binary-options-scams

 Recently, on November 2018, German Federal Financial Supervisory Authority BaFin announced that it is planning to prohibit the marketing, distribution, and sale of binary options to retail clients at a national level. Overall, mostly all respected regulators confirm a fact of an extreme risk involved in binary trading, therefore the majority of authorities alerts if you are offered binary options it is probably a scam.

After all, there are too many tragic stories about binary options victims, it became so common that the authorities try their best in order to prevent a population from fraudulent.

How to protect yourself

However, the regulators are not able to power each and every offering or specific jurisdiction where most of the scammers based. In many instances, you should protect yourself and be aware of an interaction, that takes place with a purpose to take your money.

There is no any guarantee on a statement made at the broker’s website, thus do not believe on every statement, specifically about its registration status, but carefully check on through official regulatory sources. Scams often present themselves as a reputable firm with professional data, an allured attractive possibilities of high gains and fast outcomes. Yet, often its all faked, always remember because information looks official, it does not mean it is.

Always verify the broker’s registers before dealing with them and check on the reputation, as well read Forex Brokers reviews. Probably, if the firm is not authorized it is a high risk to be a scam. You can always check Warning lists issued by the industry authorities and of course, you should consider strongly any issues, as well review the List of Brokers to Avoid

If you got scammed

In case you fall, a victim of Binary Option scams, at first you should immediately recall the credit card and try to withdraw funds from an account. Because scams are likely located overseas, there is almost no way to get any money back or to receive any sort of support.

The typical traders complain included refusal to credit accounts or return funds and in fact, are not able to be supported further, as simply the company is not regulated or compensated by anyone. However, you should report a scam to specified authorities and better to access a specialist to advise on your following steps. The regulators like UK’s FCA, Australian ASIC, Cyprus CySEC or others provide an open and well-guided complaint procedure, therefore you should contact authority immediately in case there are any concerns.

Submit your complaint about Australian Broker to ASIC: www.fos.org.au

Cyprus Broker to CySEC: www.cysec.gov.cy/en-GB/complaints/how-to-complain/

UK Broker to FCA: help.financial-ombudsman.org.uk

If you invested with a non-regulated entity, there is no investment protection applied, as well as there is no established compensation, unlike the Regulated Forex Brokers status provides.

Conclusion

The sad truth is that scams among the binary options trading market are something that dominates among the offering. While the broker may provide a robotic software or to act as a broker, the trader should always keep caution against scams.

Overall, it is very high risk, noting facts and issues happened to thousands of investors around the world, to engage in Binary Options trading. We can not recommend trading with binary option brokers due to the revealed facts and numerous warning issued by the trusted authorities around the world. We value a transparent operation and investment service, therefore both reliable and trusted brokers will be always regulated and authorities in terms of their offering and performance. On the contrary, we offer to check out a list of Regulated Brokers and description of their investment proposal, which is available by the link.

Forex Trading: Why Avoid IFSC Brokers from Belize

IFSC Belize Regulator

Formed: January 1, 1999

Jurisdiction: Belize

Headquarters: Belize City

Website: www.ifsc.gov.bz

IFSC is responsible for licensing of the following:

  • International Business Companies (IBCs)
  • International Asset Protection and Management
  • Brokerage, Consultancy and Advisory Services in any financial services
  • Trading in Foreign Exchange, Financial Commodity-Based Derivatives and Other Securities
  • Money Transmission Services
  • Payment Processing Services
  • Money Brokering
  • Money Lending and Pawning
  • Money Exchange
  • Safe Custody Services

Introduction

The financial services sector of Belize, in particular, international Forex and trading services companies, is a relative newcomer within the financial industry, yet recently expanded Belize economy to a world-recognized hub.

Belize as an English-speaking country in the heart of Central America obtained its independence in 1981 and since then approaches to diversify its portfolio through various opportunities to international investors and for instance included an attractive offering to firms operating financial services. Belize possibility, which is based on the offshore concept allows investors to engage in a variety of activities, obtain official status, run brokerage accounts, operate trading service, commission arrangements and other commercial transactions. Belize is also an active member of the Caribbean Financial Action Task Force (CFATF) that subscribes to its core principles to eradicate money laundering and to foster stability in the global financial system. 

While developing and through its enlargement of potential, many online forex brokers used a Belizean IBC as a perfect opportunity to run international brokerage service and make authorized financial transactions. Therefore, through its growing demand and necessity, Belize established independent local authority with a purpose to carry out financial regulation responsibilities including licensing of financial market participants and exchanges, and the supervision of their activities itself. The International Financial Service Commission or IFSC Belize started its operation in 1999 as a government agency to protect the reputation of Belize as an offshore financial center.

IFSC being a self-regulatory body operates through a set of international rules is in charge of licensing of all international financial service providers through a set of requirements that designed to ensure compliance with international best practices. The scope of responsibilities includes promotion and protection of Belize as it became an important international financial center, through regulation and supervision of international financial service providers. In addition, IFSC powered to impose administrative sanctions and disciplinary penalties for a brokerage or investment firms that come under the relevant Belize financial acts.

https://www.ifsc.gov.bz/about-ifsc/

Why not trade with an IFSC registered broker?

Belize as a gorgeous tourist destination, while also is tax heaven with a zero tax structure that established its own regulation for financial investment and Forex firms licensing due to high demand and necessity of regulation. Ever since Belize became a known offshore zone and Forex hub, as destination attracted thousands of brokerages seeking for an opportunity to be legitimate firm, yet to skip complicated and costly establish procedures.

Therefore, development of perfect business environment attracted numerous enthusiasts and made Belize as an investor-friendly economy that enables business growth, however those firms and individuals that are seeking for an opportunity to enable easy fraud process were allured as well. Definitely, it’s a very profitable chance to open brokerage firm in a destination that saving establishment costs and allows to enjoy almost unlimited profits. 

So getting back to the point, why an offshore broker or investment firm is not a recommended option to any trader, let us look closed what are the requirements to become a licensed IFSC company. First of all the firm should maintain its minimum operating capital depending on the service from $10,000 to $100,000, then to pay international financial service provider fee of $1,000 only! The annual license fee varies on various kinds of financial services that also include Forex, trading securities, derivatives, and financial instruments, while a fee is either $2,500, $5,000, $25,000.

Yet, if to compare to reputable regulatory supervision, these rates are extremely low, while the costs of setting up considered to be one of the lowest worldwide. Meaning, the company is not able to operate or guarantee the safest trading environment with such a lack of capital, even more, brings uncertainty to brokers performance. Moreover, there is no strict requirement for a company to segregate clients funds from the company ones, a meaning broker can use trader’s investment for their own purposes, like heavy advertising as an example. The broker is not either shall establish a physical branch or office in a destination, while the directors and management would be only slightly checked in terms of their proficiency.

In regards to audit and control of how the Forex broker or company operates, the IFSC does not implement comprehensive reporting demand, so the company can easily hide its true nature of performance.

Although IFSC makes its best to regulate and restrict firms by impose of fines, most of IFSC brokers getting out of unlikely situation quite easy, as fewer standards allow to enjoy almost free operation in financial markets.

In comparison to trusted authorities in the EU, the US or other jurisdictions, the regulated broker catered and demanded to detail commitment in regards to trader protection, while IFSC companies still operate with an environment sufficiently to fraudulent activities.

Complaints and scams

While the main duties of the IFSC, concerns about the provision of effective services and registration of international companies, the authorization process and accepts complaints from foreign traders. The trader should firstly contact his service provider and try to resolve an issue through the company, yet in case you are not satisfied with the handling result to move further and contact the authority. The transfer of the complaint to IFSC should include detailed data with information on the company complaining, as well as evidence documentation.

Submit a complaint by the contact email: complaints@ifsc.gov.bz

Based on the findings, IFSC may impose a statement to the company with a requirement of compensation. The IFSC is not responsible for further compensation, therefore quite often the dishonest brokers disappeared or didn’t take stated action, as the authority can do nothing about it. Means, the trader will remain on his own to resolve issue further and can only submit a case to the court for appeal.

The IFSC adheres to promote the development of the Belize financial service industry and due to numerous frauds and high activity of scams specifically from an offshore zone, the authority submits from time to time warnings against slippery brokerages and other protective information. To alert the public and financial sector whether such an offering appears in the market IFSC post notice that includes only those firms that are not registered under the IFSC or obviously false certification or licenses. Means the authority didn’t check on the firm before it establishes and can’t support by any data how they operate. However, due to the lack of Belize regulation requirements itself, and its set of standards which is unfortunately very far comparing to the trusted industry regulators, the statements rather not convincing and effectiveness remains questionable.

IFSC Warning Notices: https://www.ifsc.gov.bz/category/warning-notices/

List of Belize Forex Brokers:

About 50 Belize Forex Brokers were reviewed by us, in fact, most of them appeared in the list of Brokers to avoid as the implemented safety measures do not allow us to trust them. Thus we do not recommend trading with them and advise to consider only those that hold additional licenses or regulated by trusted jurisdictions.

The lists of IFSC licensed service providers are regularly updated through an official website and available for verification at all times.

“Investors and other users are warned not to deal with any entity whose name does not appear on the list for the service or business in question. It should also be noted that under the laws of Belize, a separate license is required for each kind of service or activity.”

https://www.ifsc.gov.bz/licensed-service-providers/

Conclusion:

Forex trading witnessed thousands of scams and numerous malpractices that were taken by unethical brokers, while in fact the majority of them indeed located in an offshore zone and known heavens with zero taxes. The most dishonest ones always seeking the easiest way to establish allegedly legal firm, through a license that does not implement a strict regulation or reporting. The fraudulent activities carried out in a most sophisticated way while it’s been hard to detect from where the offering coming from. Therefore, traders should always be aware of these firms that corrupted an image of Forex trading and trust to only well-regulated brokers incorporated and heavily regulated by the known authorities like UK’s FCA, Australian ASIC and similar.

Considering the fact that IFSC has not implemented the strictest standardization that may guarantee trustable provision of Forex or trading service delivery, we do not recommend choosing among IFSC companies. Although, a newly implemented increase of the capital requirement definitely assists in a further decrease of new suspicious brokerages establish and those firms that seeking for an easy solution to skip regulation. However, currently, there are international brokers that do hold multiple licenses, including IFSC one and are regulated by other jurisdictions, which allows them to deliver an excellent environment for trading. Therefore, you should choose a broker and forex trading provider among existing testimonials and consider only those that are regulated. Check out our recent articles about ASIC, FCA or other authorities to see the difference between the implemented regulations.

Forex Trading Scams

Who are Forex Trading or Forex Broker scams? How they work?

How to avoid scams or what to do if you already scammed?

We are here to answer all typical questions traders might have, as an increasing flow of trading scams with sophisticated attempts that target, actually, everyone with promises of miraculous gains, high returns and chances to trade in Foreign Exchanges, CFDs, Binary Options or other derivatives.

However, the main aim of scammers is to get your money or personal details. Everybody likely to be a victim of a scam that is why you have to know how to protect yourself and spot fake offering.

How Forex Trading scam work

With an alert in your mind that scams do exist, any trader or investor should deal with any business offering or uninvited contacts very carefully. In fact, a detailed check of the information about the potential broker, its official legal data, and their compliance to service providing standards and of course implementation of protective tools, stand at the glance of any further steps. Many firms pretend to be a legal entity or username, registration number from the regulated broker while pretending to be official but in fact are just clone firms. Scammers also might claim to be an overseas firm and initially succeed to look like a real brokerage, as technology is getting smarter.

Do not believe on every statement the broker’s website may say, specifically about its legal registration or authorization status, as scams hiding themselves behind official data. Most of the information can be faked, while official license data is always open through the regulators websites and accessible at any time, so examine it carefully. The reality is that only officially regulated brokers should accurately state any sentence and provide the exact service as every word mentions on the website, since the authority checking on it. In return, the rest of “firms” can promise whatever looks and sounds like a very attractive investment opportunity with the highest potential gains, but in fact, no one guarantees its nature. Just because the information looks official and true, it does not mean it is.

Furthermore, as the scammed traders report most often the broker will allow very small initial deposit as an exclusive offering, run attractive, allegedly smooth trading experience and even process some withdrawal just to give a successful impression that there is nothing to worry about. However, further on the trader may invest more money with a purpose of higher gains and sooner or later the returns will end, the account might all of the sudden become blocked or trader will face manipulation on price feed during a trading session and the balance had gone.

Another typical scam issue happens with withdrawal processing, the funds getting stack in the account or the trader receives ignorance, with no response or the company accused of unreasonably withholding the money of its clients. Unfortunately, these practices are very common among frauds and every trader should size actuality of non-regulated firms that simply operate traders, their accounts and funds by their own way, with no reporting or control from any authority, therefore those firms most likely scams.

How to protect yourself

Even though the authorities and legal institutions taking serious steps to protect clients by public education, guidelines about investment service and constant monitor of the market offering with an updated list of recommendations, as well companies which should be avoided. There are thousands of new scams appearing every day and year, so of course, none of the authorities or watchdogs can keep an eye on all of them. Therefore, every trader should follow a certain guideline in order to recognize rather the trading offering worth attention or you should protect yourself and avoid any further contact with the company. This list of recommendations includes:

  • Do not open or click on the suspicious links, and keep your devices and computers secure.
  • Be very cautious while dealing with any representative, as the scammers may reach you out through any available source like email, social media, various chats or website and most often will try to get into your trust. A further scenario will go to an attractive offering in quick and high gains with no bother.
  • Keep your personal, identifiable and money information secured, never share any sort of documentation with representatives personally. Do not agree to send money or give credit card details to someone, as well as beware about unusual payment processing methods and payment requests, which often includes virtual currency like Bitcoin.
  • Do not respond to rush in account opening or call to act immediately due to some sort of “hot offer”. Scammers usually use high-pressure tactics to get you to fund the account soonest possible, but it is not a good idea to make a fast decision without prelaminar careful review and consideration of all risks involved.
  • Always verify the broker’s registers before dealing with any firm and check on their reputation, as well read Forex Brokers reviews. Probably, if the firm is not authorized it is a high risk to be a scam. You can always check Warning lists issued by the industry authorities and of course, you should consider strongly any issues, as well review the List of Brokers to Avoid.

If you got scammed

In case you got already scammed, well, you should report a scam to specified authorities and better to access a specialist to advise on your following steps. The regulators like UK’s FCA, Australian ASIC, Cyprus CySEC or others provide an open and well-guided complaint procedure, therefore you should contact authority immediately in case there are any concerns.

Submit your complaint about Australian Broker to ASIC: www.fos.org.au

Cyprus Broker to CySEC: www.cysec.gov.cy/en-GB/complaints/how-to-complain/

UK Broker to FCA: help.financial-ombudsman.org.uk

If you traded or invested with a non-regulated entity, there is no investment protection applied, as well as there is no established compensation, unlike the Regulated Forex Brokers status provides.

In addition, you should keep an eye further as those who became victims of scams are likely to be targeted again by other companies, as simply scammers sell out the information about potential investors further on.

Conclusion

Scammers can trick you with a strong attempt to convince in their genuine financial trading service, yet getting only to hand over money. You should make sure that any offering or investment advice from the company or representative is a legal and strictly overseen service. We advise seriously consider only reputable financial advice or guidance before investing, as well as to do your own research. Always check on the firm attentively, read out the Forex Brokers Reviews, confirm registers and do not rely only on the information provided by the potential company. And of course, better choose your trading brokerage among Regulated Forex Brokers.

If you think the company or another is likely to be a scam, do not deal with them any further and report broker to the particular authority.

Forex Trading: Why Avoid Brokers from Vanuatu

VFSC Regulator

Formed: December, 1993

Jurisdiction: The Republic of Vanuatu

Website: www.vfsc.vu

VFSC is responsible for administering the following pieces of legislation:

  • Anti-Money Laundering And Counter-Terrorism Financing
  • Business Names Act
  • Companies (Insolvency and Receivership)
  • Companies
  • Company and Trust Services Providers
  • Charitable Associations (Incorporation)
  • Credit Unions Act
  • Dealers In Securities (Licensing)
  • Electronic Transactions
  • E-Business
  • Financial Institutions
  • Foundation
  • International Banking
  • International Companies
  • Insolvency (Cross-border)
  • Mutual Funds
  • Offshore Limited Partnerships
  • Partnership
  • Personal Property Securities
  • Protected Cells Companies
  • Trade Unions
  • Unit Trusts

Introduction

The Vanuatu Financial Services Commission (VFSC) was formally established in December 1993, as a regulatory body to oversee investment and credit services, as well as other financial providers. Vanuatu itself gained its independent status since 1980 and is an archipelago of approximately 83 islands situated in the South-western Pacific Ocean. Recently

VFSC supported by a Deputy Commissioner while four departments divide their functional responsibilities, including Corporate Services, Insolvency, Legal Enforcement and Compliance and Registration. Each of the departments performs with a purpose to meet obligations and ensure the current administrative and support assignment with an aim to establish recognized internationally reputable and commercially attractive Vanuatu’s Financial industry.

The Securities License in Vanuatu allows to carry out international brokerage service with the ability to buy, sell and trade securities such as shares, bonds, options etc, as well as manage a portfolio of investments for and on behalf of clients. 

https://www.vfsc.vu/about-us/

Why not trade with a VFSC registered broker?

Indeed, the Vanuatu jurisdiction gained its popularity among the investors and business owners in the Forex industry looking to become a regulated broker, yet obtain its status through a simplified process and operate almost without supervision. Eventually, small Pacific island Vanuatu became very well-known and a paradise of financial industry owners, as Vanuatu proposed not only opportunity to become an official financial service firm but to enjoy a variety of tax benefits and avoid legal challenges. Therefore, many international companies looking for a solution and an offshore zone to enable their business ideas placed their interest in Vanuatu and incorporate their firms there.

Increasingly popular regulation of Vanuatu shows its demand specifically among the Binary Options and other FX Brokers since the set of VFSC demands to establish a business is a very attractive opportunity, while more from the companies understands the necessity of regulation status. Brokers understand that regulatory improve their reputation, trust increases dramatically among the traders, as well as other additional benefits are enjoyed, alike international payment providing acceptance.

However, in a matter of fact that the main responsibility of the VFSC is a registration process only, which is merely implemented through low setup requirements. Consequently, easy registration process with low costs, and very quick establish invites various brokerages to be registered out there. Perhaps, Vanuatu is the easiest jurisdiction to open a brokerage, as the opening requires the company to submit a register online, prove initial establish capital which is $2,000 only!, to pay a fee, and within a 2-3 month, the firm is crisp and registered. The VFSC regulator does not require strict proof of the company background, nor check on the implementation of the secure fund management or operation guidelines, does not require regular reporting and further on never impose fines in case of the fraud operation. The authority is in charge of the official reporting of the company legitimate issues only, means the broker should submit a report once a year only, with no details of services provided. In return, compared to the industry-leading authorities’ legislation (alike UK FCA or Australian ASIC), the VFSC report requirement is far beyond the necessary level that may protect from the company’s fraud operation and reveal the cold-hearted acts. In fact, the report submits only the company returns and expenses, as well the general activity and has nothing to do with protective measures towards the clients.

Consequently, the cost of the brokerage becomes very low compared to industry leading licensing or even to some other offshore financial centers, while the firm may set up operation even without the need to maintain a physical office. Obviously, it comes to the point that the investment and trading with VFSC brokers do not provide any guarantees of the company sustainability, its serious measures and what is extremely risky, does not implement any protection that protects from fall to the scam or fraud.

Overall, the VFSC regulation and Vanuatu itself might be an attractive opportunity to open a business, but is not a likable regulation for traders or investors. With growing demand and popularity of trading and the Forex industry itself, before you entrust any broker your funds, strongly consider sharp check on a broker and engage only with those that are regulated through a recommended authorities alike FCA, FINMA, ASIC or others. Remember also that not every company stated its regulation is indeed regulated one, as many brokerages mention its regulated nature but in fact holding an offshore license only. We do not recommend trading with an offshore, non-regulated or brokers that holds no license, as such these offerings should be avoided by every mean!

Complaints and scams

While the main duties of VFSC, as mentioned by the authority, concern about the provision of effective services for the supervision of financial business to protect the public against financial loss out of dishonesty. Yet, the authority does not assist in case the trader was victimized or fall under scam by a Forex Broker incorporated in Vanuatu. In the scenario of funds lost, the trader remains alone and unprotected to recover funds from the VFSC Broker, while the chances of refunds are minimized.

However, In case you not satisfied with the investment transaction, you can submit a complaint through an VFSC contact form https://www.vfsc.vu/fees-help-support/contact-us/

Yet, most often the regulation is not able to assist and will refer to the point that the trader using the services at his own risk.

Even though, the VFSC authority tries to promote the development of the Vanuatu financial service industry by submitting from time to time warnings against those companies that mention their registration by VFSC, mislead or false information about service providing. However, this is the maximum the authority can do to protect clients.

List of Vanuatu Forex Brokers:

Currently, we have reviewed about 50 Vanuatu Forex Brokers, in fact none of them included into the list of trusted or regulated brokers which we recommend trading with due to lack of safety measures.

The list of Vanuatu licensed brokers, as well as additional information about companies available to check through an official online source: http://www.vfsc.vu/70-prevention-of-fraud-investments-act/

The protection of funds always stands first while trading, therefore, check on the broker carefully, revise the broker’s regulation status, updates and other information, along to the reputation by reading reviews and checking on the legit documentation. And of course, choose only reputable companies that were established in known financial centers through implemented strictest regulation of forex business and financial service itself.

Verify company reputation through the list of Brokers to avoid, or contact us in case you can’t find particular one and better do not respond or keep a distance from any cooperation with Vanuatu brokers, offshore brokers or non-regulated entities at all cost.

Conclusion:

Obviously, Forex Brokerage service, as becoming popular, must be issued with a respected regulation of Forex Broker License. It is not a matter of the protection only, but the international banks or payment providers do not accept applications from unlicensed companies. However, the licenses can be granted either by an offshore jurisdiction, which has no ability to implement the strictest qualification of the financial firms or an onshore regulatory body through imposed sharp and high requirements or legislation towards brokerages. As such, offshore brokerages may fall on various possibilities of the company operation, while in fact many of them are pure frauds.

Such investment service firms, including Vanuatu Broker and those registered by VFSC bypassing legal constraints and do not comply with costly compliance of the jurisdictions that solicitude at first about customer-oriented offering through protecting tools. 

So when it comes to the point of choosing the best firm to trade with, the trader or investor should protect himself and better to consider brokerages from reputable jurisdictions that maintain a sustainable level of protection. The financial investment and trading providing itself require the strictest overseeing by the industry authorities, otherwise the risks may incur traders to lose capital or fall under scams. To assist you and discover more about the differences or applicable management of the regulated brokers check out the ASIC Regulator or FCA Regulator articles by the links.

Forex Trading: Why Avoid Brokers from St Vincent & The Grenadines

SVG FSA RegulatorFormed: November 12, 2012
Jurisdiction: St. Vincent and the Grenadines
Headquarters: Kingstown
Website: http://www.svgfsa.com/

Introduction to SVG FSA

Through an increasing demand to the financial sector and offshore zones itself, it was a need to create the Financial Services Authority with a responsibility to regulate non-bank, certain entities in the financial sector and control the international financial services industry in St. Vincent & the Grenadines.

The SVG FSA was established 7 years ago, November 2012, with a mission as the authority mentions on its official website, to develop, regulate and supervise St. Vincent and the Grenadines as a secure and competitive financial center in the international and the financial sector in accordance to best practices, through the promotion of integrated operation. However, the Forex Trading or Brokerage activity, which is the main topic in financial investment world also rapidly growing in its demand, does not have a solution of regulation of Forex, CFD and Binary Options in SVG.

The regulation or even licensing of the Forex business is not a part of the SVG FSA activity, as stated by the official warning.

“There are financial institutions out there that falsely claim they are registered or licensed in our jurisdiction. Their purpose for doing this is more than likely for illicit reasons and potential customers should be very cautious about conducting business with them.

FSA, St Vincent and the Grenadines. (Learn more about SVG FSA Function Role)SVG FSA website

In this St. Vincent and the Grenadines regulation review we cover the following highlights:

Why not trade with an SVG FSA registered broker?

St Vincent and the Grenadines of SVG is an island in the Caribbean, which became quite a known location for its tax haven offering out of the international companies. St Vincent is an attractive solution among the financial companies and those businesses that for the reason or another choose to operate through an offshore company. As the jurisdiction itself offers easy to achieve setup demands through very quick, simplified process, while the firm does not necessarily need an office in SVG, allowed to maintain low initial capitals, no strict establishment rules or requirements, yet allows running a global business. Furthermore, there is no sharp regulation or overseeing of the company operation implemented. In terms that the Forex business in SVG is not regulated in St Vincent, the SVG broker can run its activity, provide trading environments and accept forex payments through credit cards, but is not overseen.  

SVG FSA Forex Alert

Considering the fact that SVG FSA enables low set up requirements with No business planning, No management interview or check of the company background. While the registered company operates with No Handbook, No Regulatory Reporting, No Impose of Fines in case of its malicious service and there is No any protection implied alike Fund Segregation, Negative Balance Protection or Compensation in case of insolvency. The evident question is: Why to trade with SVG Broker?

Therefore, apart from beautiful seaside beaches, the SVG with its offshore environment became a known hub of financial firms, while the legal environment can be quite loose towards the Forex business and brokerage itself. For better understanding check out the UK’s FCA Authority and its sharp regulation, overseeing of the brokerages and heavy fines in case of the company fail to obligations.

FCA regulator

Obviously, the investment and trading service is a popular trend, however in order not to fall under the scams and frauds, which are in fact growing daily, you should carefully choose a company before any funding is done. The Forex and derivatives trading as a decentralized market can be a highly risky opportunity if the company delivers trading service without strict overseeing from the industry authority. For that reason, we always advise choosing among the most reputable and of course heavily regulated brokers and to protect yourself from potential scammers. For instance, as an example learn and compare eToro offering and heavy regulation. To get more knowledge, you can also read our article Forex Trading Scams and know how to protect yourself, with a deeper understanding of how frauds work.

In addition, most often an offshore broker alike SVG Brokers are associated with other companies while the offering varies slightly from the majority of frauds, yet the result is equally disappointing. The major concern about lack of regulatory oversight places SVG companies much under the recommended safety line, in essence, you only get the honest word of the company.

Complaints and scams to SVG FSA

We have received many user reviews, while the majority of them are obviously negative. What are the Complaints about? Rejects client withdrawal, meaning a client who puts money cannot get profits or funds back.

In that scenario, SVG FSA will not be able to assist through customer protection, to advise or take action further, the trader stands completely alone at that point. Therefore, there is no way to complain or receive any support from the authority.

SVG complaints and support

In addition, there are many fake brokers stating their address, regulation or registration at SVG, while pretending to be a legit firm. The SVG authority recognized that potential and warns potential or already engaged traders that in case of trading with an unlicensed and unregulated company the trader using the services at his own risk. As an unlicensed or offshore broker most often not subject to any supervision of practice or regulatory laws the company may easily mislead or false any information or the service providing itself.

The only way the SVG FSA tries its attempt to protect clients is to place an advise and list entities at the alert area as of the false license claims in the SVG jurisdiction, yet the protection “actions” are ending just by that. SVG FSA – Investor Alerts 

SVG FSA Investor Alert

List of St Vincent and the Grenadines Forex Brokers

Currently, we have reviewed many Forex Brokers from St. Vincent and the Grenadines, while none of them were included into the list of trusted or brokers with a recommendation of safe trading. The only companies that may be trusted are those brokerages that hold additional licenses from the reputable authorities and at the same time run business in SVG. Check on the broker carefully before any signing in is done, revise the broker’s regulation status, its authorization claims, news and reputation by reading reviews and checking on the legit documentation.

As well, you can find and verify company at the regularly updated list of Brokers to avoid or submit your inquiry. Then if you found a broker at the list you better stay away from any cooperation or trading with them at all cost, as listing consists of mainly non-regulated and offshore firms.

Conclusion on SVG regulation

The final thoughts conclude the traders and investors should ensure a clear understanding of the procedures and risks involved while the company or another offering the forex trading opportunity and not properly licensed.

As of the recent growth of international trend of Forex, trading investors are urged to exercise caution before any sign in or acceptance of the offering. Any broker declares its regulation by FSA SVG, in substance, made a false claim. As it became clear now, why the SVG incorporated firms disclose information on the risks, in particular, the possibilities of loss, therefore we recommend avoiding offering from the brokers mentioning their SVG FCA regulated status. In order to become a trustable company in providing financial and trading service, the firm should be sharply regulated and retain a sufficient level of reputation through its operational history. Definitely, it is not a gaining point towards trust to the brokerage that is an offshore based company and was established with a low registration requirement while none of the protective principles followed.

The security of funds always stands first, therefore, you better consider brokerages from other jurisdictions that maintain a sustainable level of financial and investment services and forex trading in particular through a protective set of rules. Check out the list of regulated and recommended brokers by the link.