Binary options, FX complaints account for 65% of total received by France’s AMF in 2016
Binary options and FX were the topic of 30% of all enquiries and of 65% of all complaints received by France’s financial markets regulator last year.
Binary options and Forex were one of the main topics of enquiries and complaints of French residents last year. According to the Annual Report for 2016 published by France’s financial markets regulator AMF earlier today, 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.
Concerning advertising, online trading dominated last year, as investment product ads accounted for 45% of new ads in 2016.
The French regulator notes that a major step towards putting an end to high-risk financial products advertising was made thanks to the introduction of the Sapin 2 law. The AMF explains that the law bans all electronic advertising of such products – this includes email, banners, social networks, TV, radio, SMS, etc. The advertising on paper is not affected.
The regulator notes that as a result of the ban, many of the fraudulent companies have shifted to new areas and are now promoting new investment products like rare earths or diamonds. There has been a rise in complaints about such marketing activities and fraudulent entities.
More stunningly, as FinanceFeeds has noted, many binary options brokers have simply refused to comply with the new law and keep advertising their products and services online. Moreover, they continue with their sponsorships of sports teams. Some of them refer to a section of the Sapin 2 law which says that partnerships should be terminated not later than June 30, 2017, but forget that this “grace period” applies solely to partnerships running through July 1, 2016.
Those companies that do not comply with the ban face fines of EUR 100,000. Whether such a monetary penalty will be sufficient to dissuade binary options firms from marketing their products and services remains to be seen.
The numbers regarding the losses suffered from trading of high-risk products like FX and binary options are pretty straightforward. According to the Paris Public Prosecutor’s Office, these losses have topped EUR 4 billion over the last six years.