Belgium’s FSMA opens 241 inquiries into illicit financial product offerings in 2017
In the course of the investigations, FSMA has observed that fraudulent entities are often connected to other firms against which the regulator has already acted.
Belgium’s Financial Services and Markets Authority (FSMA) has earlier today published its Annual Report for 2017, with the numbers highlighting another active year for the regulator.
FSMA notes that it collaborates with other public institutions, including judicial authorities, especially in the domain of prosecuting international fraud related to binary options, CFDs, Forex and boiler rooms. Once FSMA finds the existence of a potentially illicit offering of financial products and services, the authority may open an inquiry into the case. During 2017, FSMA launched 241 such investigations, with the number down from 273 in 2016.
In those cases where the authority is unable to terminate quickly the illicit activities, it informs the judicial authorities and issues warnings against the entity in question. In 2017, FSMA published 116 such warnings, concerning 99 firms. During these investigation, FSMA has found out that the fraudulent entities are often connected to other entities against which the regulator has earlier taken action.
Earlier this year, the Belgian regulator published data about consumer complaints, showing that it received 1,710 notifications from consumers about various financial matters in 2017, up 13% compared to 2016. Nearly half of the enquiries were questions or complaints relating to fraud and unlawful offers of financial products and services. There were 792 such messages in 2017, up by 45% compared to the previous year.
Most messages reporting fraud or unlawful offers concerned binary options, boiler rooms, pyramid schemes and ‘phishing’. New topics in 2017 included credit fraud, virtual currencies and fraud with investments in diamonds.
Number of messages:
- Pyramid schemes: 169
- Binary options: 164
- Boiler rooms: 118
- Phishing: 71
- Diamonds: 53
- Credit: 38
- Virtual currency: 33.
In 2017, the Belgian regulator has reached settlements with three CFD providers that offered financial products without having received prior consent from FSMA to do so. The brokers were fined, the regulator says.
Let’s recall that in April 2017, the Belgian regulator took action against Plus500. According to the FSMA statement, Plus500 (Plus500CY Ltd and Plus500UK Ltd) had failed to provide a prospectus for CFDs. The prospectus is necessary to describe the characteristics of an investment instrument offered to Belgian investors and to define the risks associated with this instrument. Such prospectuses have to be approved by the FSMA before a given instrument is offered to Belgian residents.
The FSMA alleged that Plus500 did not have the necessary prospectuses to offer CFD trading in Belgium. On top of a EUR550,000 fine and the publication of the associated announcement on FSMA’s website, Plus500 had to contact its Belgian clients and to offer them to terminate their contracts with the broker without any charges. Also, the broker agreed to close the website www.plus500.be and to indicate on its other websites that the trading instruments offered are not available to Belgian residents.
