Israeli watchdog, ISA fined AvaTrade Israeli Branch ATRADE Misleading Advertisement which suggested that it's safer to trade with a licensed brokerage.
9 May, AtoZForex – Brokers try everything to distinguish themselves from the strong competition within the Retail Forex Industry. However, they must not forget compliance requirements on risk involved with leveraged trading. This is exactly what happened with the AvaTrade Israeli Branch ATRADE Misleading Advertisement ISA fine in Israel.
Israel’s financial regulatory body, ISA today announced that they have fined ATRADE, Israeli Branch of AvaTrade, for misleading advertising. It is a common practice in Forex Industry that regulators consistently monitor and regulate broker offers. However, AvaTrade Israeli Branch ATRADE Misleading Advertisement fine is the first of its kind in Israel
Based on the information AtoZForex has received $42,000 (NIS150,000) AvaTrade Israeli Branch ATRADE Misleading Advertisement fine was based on 75% reduction due to several mitigating factors. These mitigations cover, the timing of the advertisement in question related to the date ATRADE receiving their ISA license. Furthermore, ISA outlines that this is a part of the new regulation.
To make it clear, AvaTrade Israeli Branch ATRADE Misleading Advertisement fine only applies on the Israeli entity and it has nothing to do with AvaTrade. Additionally, the fine is due to the marketing campaign of ATRADE across Israel. ATRADE carried out their marketing campaign across various media channels, including a video advertisement which is in question. The video ad in this marketing campaign was the specific reason why ISA considers the ATRADE marketing campaign as “misleading content”.
AvaTrade Israeli Branch ATRADE Misleading Advertisement content
AtoZForex also looked into ATRADE marketing campaign. The “misleading content” in the video advertisement is based on a message which says the following: “it is safer to trade with ATRADE now as it has received an Israeli trading arena license of the ISA.”
ISA’s conclusion is that being regulated may indicate safety of trading with the brokerage but by involving in leveraged trading a client is NOT protected from losses. Thus, they concluded video demonstrated showed ISA and the trading arena license role incorrectly.
My opinion on ATRADE ISA fine
I believe ATRADE’s advertisement was something that they rushed to do and there was no intentional misleading. They probably didn’t pay enough attention to the message between the lines. This also shows itself in the ATRADE ISA fine details and the mitigations affecting the size of the fine.
Now, here is a question. How many other brokers use similar messages? How many brokers get an FCA license and start advertising as an FCA broker while putting all of their non EU clients under offshore unregulated entities?
Share your view with us in the comments section below.