Multiple warnings from regulators against unlicensed brokers

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Brokers warnings by regulators
Brokers warnings by regulators

Financial markets across the globe have lately been busy once again chasing after unregulated brokers and issuing warning against entities that do not hold valid licenses to operate within their respective jurisdictions and targeting their nationals.

Let us have a look at the latest such cases, which keep pouring in, indicating that the online trading industry is still expanding and that regulators are also stepping up to be able to keep up to pace and better protect traders and consumers as a whole.

In the UK, the country’s Financial Conduct Authority (FCA) has published a warning against the company Financial Strategy Holdings, which is trading as New Trade FX (NewTradeFX). According to FCA this company has been found to be targeting UK clients without having the necessary permission from the UK authorities to do so.

Through its website, www.newtradefx.com, this broker offers a wide variety of Forex and CFD trading services which are made available to English, Russian, French, Italian and Arabic speaking clients. The FCA is particularly concerned by the fact that this particular company is stating that it has an address in the UK and is offering investment services to UK clients but it has no permission from the regulator to perform these activities. The FCA also seizes the opportunity to warn investors once again against dealing with unauthorized businesses.

In Japan, the country’s Financial Services Agency (FSA) has recently published an updated version of its “Black List” of companies that offer investment services to Japanese clients without possessing the necessary authorization for such activities. This is a comprehensive document which runs for some 115 pages and it is produced because Japanese financial laws treat binary options as financial trading instruments and thus require that all binary options brokers offering services to Japanese clients obtain the necessary authorization from Japan’s regulators. The same requirement also applies to overseas binary options brokers that service Japanese investors.

The most recent addition to the said “Black List” is binary options broker TRAOP, which operates via www.traop.com. The website is targeting English-speaking as well as Japanese-speaking investors willing to trade binary options and this is why it has attracted the attention of the Japanese regulator.

The broker’s website lists no information regarding any licenses or registration with any regulator, while it does not even provide a physical address for the company, stating simply that  “Traop.com is a trading platform operated by TRAOP Secretary Office (“The Company”) located in Seychelles and operated globally.”

Finally in Italy, the local watchdog Consob, has also published a warning against regarding three companies that target Italian investors without having the licenses to do so. The first company warned against is Tradect Ltd (also known as Market City International), which operates via www.tradect.com. The company provides a contact address in Romania and offers Forex trading services to Italian investors.

The second broker in the Consob warning is Eich Invest Ltd, which operates via www.brokerofgeneve.com. This is a binary options broker targeting Italian investors.

The third firm mentioned on the Italian regulator’s warning is Plea (UK) Ltd, which offers its services via www.gmtinvest.com and seeks to attract Italian residents to trade Forex and CFDs.

According to Consob none of the above mentioned firms are properly licensed and thus they are not allowed to market their services in Italy and to provide any sort of investment services to Italian clients.

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