Belgium’s FSMA: Complaints and enquiries about binary options, FX and CFDs rise 50% in 2016
One of the reasons for the steep rise in enquiries and complaints about these instruments is the ban on high-risk products implemented last August.
Belgium’s Financial Services and Markets Authority (FSMA) has been one of the active European regulators when it comes to efforts to stop fraudulent offering of products like CFDs, Forex and binary options. The Belgian regulator was amid the first to implement measures to enhance investor protection by banning the offer of high-risk financial instruments in August last year.
This is one of the reasons why we wanted to take a look at the FSMA Annual Report for 2016.
The regulator says it received 1,510 notifications from customers concerning various financial issues last year. Nearly 40% of the claims and enquiries, or 554 notifications from customers, related to products like binary options, Forex and CFDs, as well as boiler room fraud. This number marks a 50% rise from 2015 levels. One of the reasons for the increase in such enquiries, according to FSMA, is the August ban on high-risk products.
The number of investigations opened against illegal offering of online trading products was 273 in 2016, slightly down from 286 in 2015. The regulator, however, cannot open such investigations when the illegal offering is done by a foreign entity – in such a case it may only issue a warning and notify the enforcement agencies.
Another European regulator – France’s AMF has also recently published its Annual Report for 2016. In tune with the numbers seen in Belgium, the number of enquiries about products like binary options and Forex was high in France last year. Binary options and FX complaints accounted for 65% of all complaints received by the regulator last year. These products were the reason for 30% of all enquiries processed by AMF in 2016.
The French regulator noted in its report that as a result of the ban on all electronic forms of advertising of binary options and high-leverage CFDs, many of the fraudulent companies have moved to new areas and are now promoting new investment products like rare earths or diamonds. AMF has registered a rise in complaints about such marketing activities and fraudulent entities.
