Australian regulator fines Synergy Financial Markets over misleading advertising - FinanceFeeds

Australian regulator fines Synergy Financial Markets over misleading advertising

ASIC has issued Synergy with an infringement notice for false or misleading statements on its website.

Regulators across the globe are growing increasingly sensitive to the advertising of high-risk financial products including certain types of derivatives, with the latest example provided earlier today by the Australia Securities & Investments Commission (ASIC).

The Australian regulator announced that it had imposed a monetary penalty of $10,800 on Synergy Financial Markets Pty Ltd over false or misleading statements on its website. The company, which trades equities and derivatives on behalf of its clients via two managed discretionary accounts, got an infringement notice.

The regulatory action stems from Synergy’s claims that clients who invest in its managed discretionary accounts will only pay Synergy when their account generates profits.

ASIC found these claims misleading, as, regardless of whether an account was profitable, the company charged brokerage fees and commissions. Also, in one of its managed discretionary accounts, the company charges an annual management fee of 2% of an investor’s balance, regardless of the profitability of the investment.

In response to ASIC’s actions, Synergy has removed the claims triggering the penalty from its website.

Earlier this week, the UK Advertising Standards Authority (ASA) upheld a complaint against misleading advertising concerning a Forex seminar promoted by Learn to Trade Ltd. In May, the ASA ruled that an FxPro UK TV advertisement breached the Social Responsibility rules. Interestingly, in the UK, it is the advertising regulator that acts in such situations and not the Financial Conduct Authority (FCA).

Despite the bans on advertising of high-risk financial products, such as binary options and CFDs with high leverage, in countries like France, where such a ban is included in the Sapin 2 law, particular actions against these ads have been scarce. The latest report by France’s advertising self-regulatory organization ARPP indicates that advertising of financial products was not among the priorities for the body in 2016.

ARPP’s Annual Activity Report for 2016 shows that ARPP’s Jury of Advertising Ethics (also known as JDP) issued 51 opinions in response to complaints received last year. Out of these, non-compliance with financial products advertising regulations was the motif for only one decision.

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