Two Trading Platforms Operate in Spain without License

November 20, 2018 | AtoZ Markets- Recently, the Spanish regulator Comision Nacional del Mercado de Valores has identified two illegal trading platforms, operating without the CNMV license, for which the Malta Financial Services Authority updated its criteria for the entities offering trading services.

This week, Malta Financial Services Authority (MFSA) shared a report about two trading platforms, whose activities were not authorized. Both entities were identified by Spain’s National Securities Market Commission (CNMV), and not by the MFSA.

As the MFSA stated, the two companies, GUZMAN CARRERAS Y CIA and DANISPORT SIGLO, were suspected of certain illegal activities, named ‘boiler rooms’.  

'Boiler room' refers to a high-pressure selling. It is a place or operation, where high-pressure salespeople call customers, usually by phone and offer them to buy little-known shares of exotic financial products. Those products might be peddling, speculative and even fraudulent securities. Although boiler room companies claim to be legal, they still stay scammers offering worthless shares and fictitious products. 

In its report, CNMV stated that both companies, DANISPORT SIGLO, and GUZMAN CARRERAS do not hold CNMV licenses. Despite that, both entities operated as social trading platforms in Spain, and around Europe. MFSA and CNMV issued a warning against both unauthorized providers and advise investors to avoid any contact with them. Malta’s regulator has also updated its criteria for the entities, which want to offer trading services.

The step comes as the growing wave of risk warnings and concerned regulators across the EU have raised awareness about the risks in FX and CFDs trading. Brokers are now required to follow MFSA's restrictions when offering leverages to their clients. Also, the MFSA has set new rules regarding the leverage limits. Lastly, the MFSA has ordered its regulated firms to implement procedures that clearly define slippage parameters and ensure that orders are filled symmetrically.

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