Binary options remain among key enquiry topics for Spanish investors, CNMV data show
The majority of enquiries by Spanish investors in 2016 concern the authorization of Cyprus Investment Firms, as well as matters related to binary options, CFDs and other complex products.
Problems concerning binary options, CFDs and other complex products were at the core of many of the enquiries by Spanish investors last year, according to the Annual Report on Investor Complaints and Enquiries for 2016, published by the Spanish National Securities Market Commission (CNMV) earlier today.
The data show that the investors submitted 1,205 complaints and made 8,028 enquiries in 2016. It should be noted that complaints against branches of investment firms from the European Union represented 1.7% of the total, while those against foreign investment firms operating under the freedom to provide services regime accounted for 2.5% of the total.
Regarding enquiries, questions about investment firms headquartered in Cyprus operating under the freedom to provide services regime are among the key topics. Other matters at the heart of the enquiries related to binary options, CFDs and other complex products as well as the modification in the calculation of fees for securities transactions.
The trends highlighted by the Spanish report are in line with data from other European regulators. For instance, in October this year, Robert Ophèle, Chairman of France’s financial markets authority AMF, said the way toxic products are marketed remains one of the main challenges for the regulator.
He quoted statistics showing that the number of new advertisements about online trading of toxic products distributed after the Sapin 2 law came into force reached 162 at the end of August. A total of 28 providers of online trading services were responsible for these advertisements. Of these 28 companies, 26 were registered in an EU member state other than France. Of these 26 brokers, 19 were Cypriot, a fact that the AMF Chairman called barely surprising.
AMF has turned to the companies that break the law, demanding that they withdraw their ads – the majority have complied with the regulatory demands. Nevertheless, certain Cypriot companies have shown reluctance to comply with the law, the AMF Chairman has confirmed.
In the UK, the Financial Conduct Authority (FCA) is about to take over the regulation of binary options firms but protection is set to remain limited, as there will be no compensation for investors for any losses from trading binary options. The FCA has reiterated its warning about binary options scams and the high risks associated with trading binary options. In the UK, a total of 2,065 people have reported being a victim of binary options fraud to Action Fraud since 2012, with the amount lost exceeding £59 million.
