France’s AMF conducts new FX/binary options mystery shopping tour

Maria Nikolova

The mystery shopping tour was focused on online trading companies authorized by CySEC.

France’s financial markets regulator AMF has just posted the results of its latest FX/binary options mystery shopping tour. The regulator has already conducted such an experiment back in 2014 but in 2016 its efforts were focused on online trading companies authorized in Cyprus. This reflected the fact that the number of complaints regarding CySEC-authorized Forex and binary options firms received by the French regulator remains high.

The latest mystery shopping tour was conducted between August and December 2016. Initially it targeted 15 companies offering Forex and/or binary options services but 3 of these refused to accept French clients (a positive sign for them), so the mystery shoppers tested 12 companies. The shoppers checked the content of websites, including advertising, the opening of accounts, transactions, verification procedures, client questionnaires, the actual trading, the customer support, as well as the possibility to close the account and withdraw funds.

KYC practices have improved: all of the companies offered their prospective clients a questionnaire to assess his/her investor aptitude. However, all of the questionaries were auto-evaluation ones and it was up to the investor to decide whether he/she is fit to trade a given product. On the good side, if a trader admitted he/she was a newbie, all of the companies posted a warning message preventing the prospective client from trading.

There was some progress made in terms of less aggressive advertising on websites. On the downside, however, the advertising of FX/binary options education was often misleading. Half of the tested companies did not in fact provide the education services advertised. Moreover, the information was not adapted to the level of knowledge of the specific client.

Regarding trading, the conclusions are dull. Investors rarely if ever had an idea what sum they risked when they placed an order. Often, operations were executed within one click, preventing traders from verifying the trade.

All of the mystery clients managed to withdraw their funds and close their accounts without any problem.

The rather optimistic inferences drawn by the French regulator from the latest mystery shopping tour in 2016 are in contrast with the gloomy findings by FinanceFeeds’ check of the latest version of the AMF blacklist of binary options companies targeting French investors without having the necessary permission to do so. FinanceFeeds has found that there are at least 63 websites (20% of those blacklisted) that illegally target French investors, in the face of being included in the blacklist. Some 80% of the blacklisted websites are now inactive.

A swift reminder: The mystery visits conducted by France’s AMF in 2014 targeted 29 companies offering Forex and/or binary options trading online. The AMF check back then showed that often no ID was required to open an account and trade. There were also difficulties to withdraw funds – only 2 of the mystery clients that managed to open an account succeeded in getting their money back.

Read this next

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

<