The Canadian regulator settles allegations with AvaTrade for unregistered CFDs trading. AvaTrade will transfer all Canadian clients to a local broker, in addition to restricting traffic from Canada to its websites. The company agrees to settle an administrative penalty of $ 30,000 and to disgorge $ 213,428.
22 January, 2020 | AtoZ Markets – According to a statement from the ASC, AvaTrade (Ava Trade Ltd.) operated online trading platforms allowing Alberta residents to trade CFDs. AvaTrade has settled the allegations of the Alberta Securities Commission (ASC) of operating as an unregistered entity in violation of Canadian securities laws.
AvaTrade Has Settled Allegations of Unregistered CFDs Trading in Canada
According to the ASC, AvaTrade opened approximately 372 accounts for Alberta investors between May 2015 and August 2018. The company had generated more than $ 202,000 in swap, commission and spread revenues in Alberta’s accounts during this period.
AvaTrade agrees to pay an administrative penalty of $ 30,000 and to disgorge $ 213,428.00. However, it represents its net income from transactions made by residents of the province. AvaTrade has agreed with the ASC to implement internal controls and procedures to restrict Alberta residents from opening accounts. The company will transfer all Canadian customers to a local broker, in addition to limiting traffic from Canada to its websites.
AtoZ Markets team contacted AvaTrade, and the broker confirmed that it had complied with the ASC. Moreover, it closed all the accounts of its Canadian customers and liquidated their transactions by November 14, 2018. In addition, the CEO of AvaTrade commented to our team:
‘AvaTrade, as one of the most regulated brokers in the industry, continues to be at the forefront of regulation. As part of that goal, when we announced our IIROC approved collaboration with the Friedberg Mercantile Group in Canada, was to close any historical issues with the local regulators – which we have successfully now completed (‘under exemplary cooperation with the authorities’). As such – AvaTrade continues to service all Canadian clients via Friedberg Direct and will continue to do so for the long term!’ Find out more about Friedberg Direct powered by AvaTrade technology at www.avatrade.ca
The Brokerage Did Not Specifically Target Local Investors
The ASC stated that the settlement resolves allegations that AvaTrade’s UK Virgin Islands-regulated subsidiary violated Alberta securities law. The regulator explained that the brokerage did not specifically target local investors. It added that even though AvaTrade clashed with the securities laws, the misconduct was caused by some degree of involuntary behavior. The staff did not find any evidence of dishonest conduct. The ASC said:
“Ava Trade has been collaborative and proactive throughout the resolution of this matter. It is receiving credit for exemplary cooperation under the Policy Agreement."
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