The Comision Nacional del Mercado de Valores (CNMV), Spain’s financial regulator, said in a statement that it has added new websites illegally offering financial services to Spanish citizens to its alert list.
Financial regulators have also blacklisted a clone company claiming to be linked to an established Spanish broker-dealer company specializing in various financial services, including wealth management.
The watchdog has added more domains to its alert list, including:
FOX NEWS TRADE
BRIGHT GROUP LLC
SECUREX PLUS SOLUTIONS EOOD
CASTAN HOLDINGS LTD
PRISTINE GROUP LLC
EUDAIMON CONSULTING LLC
Although the Financial Regulator did not provide any specifics, the inclusion of the domains means they are not officially registered in Spain and are therefore not authorized to offer commercial services to local traders.
For this reason, the CNMV advises Spanish investors to check their registers before depositing funds with a broker, especially if the connected broker has used aggressive marketing techniques.
FX brokers come under scrutiny
Recently, the CNMV issued a circular setting out a number of new rules related to trading costs and risk disclosure, leverage and advertising requirements. Essentially, the new directive affects companies offering foreign exchange, contracts for difference (CFDs) and other speculative products to retail investors in Spain.
In particular, the CNMV points out that any broker who offers “excessive leverage” in excess of 10:1 must expressly warn investors that they believe that such products are not suitable for them due to their complexity and the risks involved suitable for small investors.
Operators also need to ensure that clients know the estimated cost in case they decide to close their position immediately after the transaction is completed. In addition, the CNMV expects CFDs and Forex brokers to warn their clients that the nature of margin trading means they can lose more than they originally invested.
Last year, the CNMV published a circular that took on an aggressive tone, threatening some European brokers that they might shut down their operations in Spain because the regulator was fed up with their unfair practices. Essentially, the Guide concerns companies offering Forex, Contracts for Difference (CFDs) and other speculative products to retail investors in Spain.
At the time, the Spanish regulator said it mainly investigates Cyprus-based CFD brokers and that it targets those employing overly aggressive tactics and practices. In addition, the tightening of the CNMV covers activities related to the acquisition of private customers, including information provided through marketing channels.