French ACPR report notes the worrisome Binary Options and Forex fraud in France. Despite the AFM Binary Options and Forex advertising ban, fraudsters still out there!
2 June, AtoZForex – French financial authorities have been very active in targeting the unregulated brokers across the country. Just like that, in the beginning of 2017, the key financial supervisor of France, Autorité des Marchés Financiers (AMF), has announced the Forex, CFDs, and Binary Options advertising ban.
AFM Binary Options and Forex ban
According to the AMF’s report, offers to bet on Forex or trade using Binary Options have been heavily impacting retail traders. The offers usually tend to display unrealistic returns and are promoted through advertisements on high-traffic websites. In addition, firms offering such deals are often unregulated and involved in fraudulent activities. As a result, investors lose significant sums of money. In order to prevent this from happening, the French AMF has introduced the ban on digital advertising of high-risk products.
French regulator’s efforts to ensure the safe trading environment coupled with other European regulators in order to strengthen the overall transparency of the market.
ACPR annual report
However, financial fraudsters do not surrender. The France’s Prudential Supervision and Resolution Authority (ACPR) has issued its 2016 Annual Report. In the ACPR annual report, the authority states that the number of fraudulent firms targeting French investors’ community is still high. According to the presented data, the number of complaints about the unregulated entities during 2016 did not significantly diminish. Let’s take a look at the numbers.
The regulator reports as much as 6,577 complaints in 2016, with the 11% drop in number from 2015. Here one might say that it is an improvement. However, the number of complaints in 2015 rose 31 percent year-on-year. When looking at the situation from this perspective, things do not look too bright. Therefore, the Prudential Supervision and Resolution Authority has required explanations from 10 percent of the firms from the industry.
In addition, the watchdog states that the biggest part of complaints was linked to the Binary Options and Forex fraud in France.
Binary Options and Forex fraud in France
These findings largely reflect the data from the AMF’s Ombudsman Office 2016 Annual Report. The report stated that the Office has received 116 complaints about Forex and Binary Options entities that have registration in the EU. This number is lower than the one of 2015, when the AMF Ombudsman Office received 139 complaints. Nevertheless, the overall trend is concerning. In fact, 83 percent of complaints registered the firms that have registration in Cyprus.
According to the report, complaints listed psychological manipulation, harassment and loss of funds from the trading accounts. All of these practices emerged from CySEC regulated brokerages. In relation to these cases, the Cyprus Securities and Exchange Commission (CySEC) has reiterated the new standards of AMF regulation.
In April this year, the CySEC has issued a circular for Cyprus Investment Firms (CIFs). The Cypriot watchdog’s circular emerged as a reminder for the CIFs about the French law that prohibits the offering of speculative, complex, and risky products to the French clients.
Binary Options brokers football clubs sponsorship
Additionally, the Ombudsman report highlights that the high-risk product’s advertising by football clubs have the strong impact on the industry. Moreover, aggressive phone calls were noted as a significant impact factor.
French ACPR has received 3,933 advertisements of financial products in 2016. The number is stressing the necessity to manage the unfair ads of high-risk financial products. The entities that are entering the sponsorship deals with sports are also under the regulatory spotlight. The regulator has ordered the firms to terminate such sponsorships until the 30th of June, 2017.
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