Spain’s CNMV warns of unregulated forex broker FXGIM

Posted on by bar

CNMV logo
Spain’s financial markets and services regulator CNMV issued a warning against FXGIM. According to the public warning notice, FXGIM, operated by FXGIM Global Investment Markets Ltd., is not authorized to provide investment services or investment advice and auxiliary services, including foreign currency transactions in Spain.
The National Securities Market Commission (often abbreviated as CNMV) is the Spanish government agency responsible for the financial regulation of the securities markets in Spain. It is an independent agency that falls under the Ministry of Economy, Industry and Competitiveness. The regulator maintains a register with investment companies that are authorized to operate in Spain.

FXGIM logo
FXGIM specializes in Forex, Futures market and commodities trading and operates through the website www.fxgim.com. The company is owned and managed by FXGIM Global Investment Markets Ltd. They claim to be located in Nicosia, Cyprus, but the company is actually not regulated in Cyprus. Also, the terms and conditions disclose that the company is under the jurisdiction of the Republic of Seychelles, where the actual broker's location might be.
The website is supported by two contact numbers (British and Spanish), and probably the company has been targeting residents of these countries. Although, the company is not licensed in any of those countries, and there is no regulatory body that monitors its activity to ensure it sticks to best practices.
The firm also claims to be a leader in online Forex trading and provides the list of its forex awards such as Best Forex Technical Analysis Provider 2016, The Best Forex Education 2015, Best Online Currency Broker in The World 2015-2016 etc. After checking this info with the reliable sources, we can reassure you that FXGIM has never been nominated or gotten any of these awards.
We recommend to stay away from the unregulated brokers and pay more attention to the reliable and licensed ones. All the warnings from the regulators are meant to protect the public from the fraudulent unlawful financial activity.
You can read our review on this broker here.

BaFin maintains prohibition of binary options for retail clients in Germany

Posted on by bar

BaFin Regulator

The marketing, distribution, and sale of binary options to retail clients will remain prohibited in Germany. This is set out in a general administrative act issued by BaFin in response to the expiry of the product intervention measure imposed by the European Securities and Markets Authority (ESMA).

In particular, BaFin sees risks and thus considerable investor protection concerns in that binary options are complex and lack transparency, especially with regard to the calculation of their performance and the underlying. Unlike other financial instruments, binary options are not traded on a market where prices result from supply and demand. Instead, it is the provider who determines the price, and clients are not in a position to understand it or check its accuracy. 

As binary options typically are extremely short-term instruments, it is difficult for retail investors to accurately assess the risk-return profile. Moreover, binary options providers usually act as the direct counterparty to their clients’ trades. This places the provider’s interests in direct conflict with those of its investors. For instance, there is a risk that providers will manipulate the price of the underlying at the expiry of the binary option or change the term of the binary option by seconds or milliseconds so as to avoid having to pay out on the option contract.

The marketing, distribution and sale of binary options to retail clients have so far been prohibited in the European Union due to a temporary measure imposed by ESMA. This measure expires on 1 July 2019. BaFin’s general administrative act is published on the BaFin website and will be applicable from 2 July 2019.

CySEC reforms Investor Compensation Fund to enhance investor protection

Posted on by bar

Regulator CySEC

The Cyprus Securities and Exchange Commission (CySEC) is changing its approach to the compensation of investors. On 13th of March, the Cyprus financial watchdog introduced the final set of reforms to the legal framework governing the operation of the Investor Compensation Fund (ICF). The updated rules reflect the more stringent approach of the Cypriot regulator, as it tries to find solutions in response to the loss of customer funds observed in recent years.

The obligation to participate in the ICF applies to all investment services and to ancillary custody services irrespective of whether clients’ funds and financial instruments are held.

Changes made by the regulator will take effect immediately, with all CIFs required to fulfill the following mandatory provisions. To cover the administrative and operational expenses of the ICF, the new directive introduces annual fees of 700 euros for firms owning clients' assets and 100 euros per year for members who do not have acceptable means.

It is reported that CySEC will remove any provisions in relation to limiting or refunding the contributions of the members that will be paid to the ICF pursuant to the New ICF Directive. Also, the regulator will not limit potential extraordinary contributions by an ICF member in the event of an adverse scenario which requires the ICF to fund compensation due to investors, should the necessary requirements be met.

CySEC changed the maximum compensation for valid claims from the current 100% with a maximum of 20,000 euros so that it constitutes either 90% of the total covered claims or 20,000 euros, whichever is lower.

CySEC chairman Demetra Kalogeru has commented on the new rules: “The upgraded regulatory framework governing the Investor Compensation Fund provides for a balanced, proportionate and risk-based approach to determining the level of contributions required by member firms. The robustness of the ICF is fundamental to maintaining investor confidence, and ultimately investor protection. Our thorough consultation and resulting changes will help ensure it is a well-funded and resilient mechanism to support the compensation of eligible investors in the event of last-resort market failure.”

WTI Benchmark Falling: Oil at an Important Crossroad

Posted on by bar
WTI Benchmark Falling Chart

The West Texas Intermediate (WTI) benchmark has been falling recently, and the price dipped below the psychological 100 USD threshold. Can the short-term bearish trend continue?

To bring price stability to the oil market, the IEA has promised to infuse an additional 60 million barrels of oil into the global supply from its strategic oil stocks for the next two months. The additional supply from the IEA will strengthen the release of 180 million barrels by US President Joe Biden out of their Strategic Petroleum Reserve (SPR), announced a few weeks ago.

Additionally, the ongoing COVID-19 restrictions and lockdowns in China have led to a decline in demand from China, the world's largest importer of oil, likely helping WTI oil decline to double digits again.

In other news, The European Union (EU) is holding a high-level dialogue meeting with the Organization of the Petroleum Exporting Countries (OPEC) on Monday, as the EU is looking at ways to step up sanctions against Russia, including an oil embargo.

However, Europe is split on an immediate oil embargo, with the EU's most significant economy. Germany, currently unwilling to go for it, saying an oil ban would plunge Germany and Europe into a deep recession. So, is the EU sanctioning themselves, or what is the plan here?

Technically speaking, oil is now testing March lows near the 94.50 USD level. We might see a quick decline toward 90 USD if the price drops below it. In case peace is restored between Ukraine and Russia, the WTI benchmark can drop further toward the 200-day moving average, near 81.50 USD (the green line).

Alternatively, if bulls defend the mentioned support, we might see a quick return to 100 USD. If oil jumps above that resistance, further gains toward 105 USD seem likely.

US Jobs Market Deteriorates, Investors Don’t Care

Posted on by Adam Smith

The recent data from the US jobs market disappointed market participants. However, they were ignored, and US equity markets continued to rip higher. So let's take a quick look at some of the key indicators.


Initial Claims Trending Higher

Although the labor market is supposedly "too robust to be in recession," anyone who bothers to look at higher frequency data will see that story disintegrating quickly as initial unemployment claims increased to 256k last week (worse than the 250k expected).
The 4-week average of new claims is currently at its highest level since November 2021, while continuing claims continue to stagnate.

US Jobs Market Chart
Source: Bloomberg

JOLTS Job Openings Disappoint

Additionally, there were fewer job opportunities in June than was previously thought.
According to the Job Openings and Labor Turnover Survey (JOLTS) by the Labor Department, there were 10.7 million open positions in the United States on the final day of June, which is less than what economists had projected and the lowest number since September. From the upwardly revised May total of 11.3 million, there was a decline of 605,000. Since reaching a record high in March, the number of openings has decreased each month.

Jobs in the retail trade accounted for more than half of the loss (-343,000). Wholesale trade (-82,000) and state and local government education also significantly reduced (-62,000). On the other hand, openings in the health and education sectors grew by 99,000.

4.24 million people left their jobs, which is the fewest since October. Construction had a decline in resignations (-51,000), while state and local government education saw a rise (+14,000).
The JOLTS report painted an almost uncomfortably strong picture of the US labor market up until May. Still, it finally cracked in June, with job openings falling at the second-fastest rate ever (only the Covid crash months were worse). Since the US is now technically in a recession, we anticipate that July and the following months will be much worse.

JOLTS Job Openings Chart
Source: Bloomberg

Non-farm Payrolls Due

The non-farm payroll data on Friday will also reveal whether businesses continued to hire in July after adding 372,000 positions in June or whether economic uncertainty caused them to cut down. The official consensus is at 250,000 new jobs in July, while the unemployment rate is expected to stay at 3.6%.
Volatility will indeed be elevated following the data, with investors repricing the hawkish expectations of monetary policy; despite no assurances by the Fed, it has changed its plans to hike rates.

The Ontario Securities Commission in Canada warns against Bristol Consulting FX

Posted on by bar

OSC logo Canadian OSC warns the public against Forex broker Bristol Consulting FX. The company targets Canadian investors. The warning comes as it is not registered in Ontario to solicit investments or provide advice on investing in, buying or selling Forex assets. The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. OSC protects investors from unfair, improper and fraudulent practices, fosters fair and efficient capital markets and maintains public and investor confidence in the integrity of those markets. Bristol Consulting FX operates on the website www.bristolconsultingfx.com  and offers Forex trading. It claims to be regulated in Panama by the address Tower Financial Centre, Calle 50, Panama, Panama. Turned out that the company is blacklisted not only by the Canadian regulator for not having the proper license but also by the Securities Market of the Republic of Panama. The warning from Panama authority was issued a few weeks earlier. It seems that Bristol Consulting FX doesn't have a license at all, which means that it is better not to deal with this company. The Ontario regulator calls for caution with all entities which aren’t registered to trade or advise in Canada. With that in mind, some of the top-tier, globally renowned brokers are based in the UK and are overseen by the Financial Conduct Authority. It is recommended to first check the lists of the regulated trustworthy brokers before making any investments.   You can read our review on this broker here.

New Zealand’s FMA Blacklists FX broker ZonggangCaifu

Posted on by bar

FMA logo

The Financial Markets Authority of New Zealand (FMA) has issued a warning against ZonggangCaifu, an unauthorized company offering Forex and CFD trading. The regulator states that the broker is not registered, licensed, or regulated in New Zealand as claimed on its websites.
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.

ZonggangCaifu logo
According to the official notice, the financial service provider registration numbers of FSP1782, FSP1762, FSP488226 and FSP536586 displayed on ZonggangCaifu’s websites belong to KVB Kunlun group of companies. KVB Kunlun is NOT affiliated with ZonggangCaifu and its websites. ZonggangCaifu could be involved in a scam.
ZonggangCaifu is owned by Zongangguoxin Group Limited and operates through the website www.zgangfx.com. The company claims to have offices in Hong Kong, the UK and the USA. It also claims to be licensed by Australian Securities & Investment Commission, Securities and Futures Commission of Hong Kong, China Banking Regulatory Commission and New Zealand’s Financial Markets Authority. However, it actually has no licenses with this regulators and even one more warning from SFC in Hong Kong. The Hong Kong Securities and Futures Commission (SFC) has listed www.zongforex.com on their alert list as “suspicious website”. Link to the SFC’s alert can be found here.
Considering all these facts we cannot recommend you to invest with ZonggangCaifu. It is much safer to trade with regulated entities overseen by reputable authorities such as FCA in the UK or ASIC in Australia.
You can read our review on this broker here.

Italy’s CONSOB warns against forex broker RichmondFG

Posted on by bar

Consob logo

Italy’s financial markets and services provider regulator CONSOB (Commissione Nazionale per le Società e la Borsa) has updated its list of forex brokers who are not licensed to operate in Italy with one new addition – RichmondFG. This broker has been offering investment services and activities to the Italian public without being authorized in the country.

Commissione Nazionale per le Società e la Borsa (CONSOB; Italian Companies and Exchange Commission) is the government authority of Italy responsible for regulating the Italian securities market. This includes the regulation of the Italian stock exchange, the Borsa Italiana.

RichmondFG logo

RichmondFG is a broker that offers its clients to trade over 800 high-liquidity assets. Stocks, Commodities, Indices, Currencies and much more. The company is owned and operated by Elit Property Vision LTD with the registered address in Sofia, Bulgaria. However, the company is not regulated by the local Financial Supervision Commission.

We have also found out that previously RichmondFG claimed to be Terraquest Media Ltd., based in Bulgaria as well, but neither of the mentioned companies is regulated. Moreover, Terraquest Media Ltd. and RichmondFG have been banned by German BaFin (Federal Financial Supervisory Authority). According to the official notice, the regulator has been receiving concerns from German traders regarding the lost money with RichmondFG. The notice also states that Richmong is not licensed nor regulated.

We recommend selecting among brokers licensed by the respective authorities in the UK, or Germany, for example. They follow multiple reporting procedures and have to keep client funds segregated from the company’s. You can read our review on this broker here.

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

Posted on by bar

CMVM logo
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 logo
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.