The Autorité des marchés financiers (AMF) has issued a warning to investors about the use of online trading platforms, primarily in the foreign exchange markets, and about trading in binary options in particular.
The Quebec regulator said Tuesday it believes that the popularity of these sorts of platforms is on the rise, based on the work of its cybersurveillance team, and the volume of complaints it has received from investors in recent months who believe they have been defrauded through this type of trading. To warn investors, the AMF also published a list of websites that are offering this type of trading without proper registration; and, it says that it will update the list when new unauthorized sites are brought to its attention.
That said, it also stresses that its list is not comprehensive, and that investors should always check the registration of a person, or company, they plan to invest with. “Offering investment services or products, whether on the Internet, from an electronic platform or in person, is a regulated activity,” it notes, adding that anyone offering investments must be registered.
The use of these kinds of platforms carry significant risks, including the possibility of falling victim to fraud, the AMF says. “Unauthorized trading platforms are sometimes associated with fraudulent schemes,” it warns. “The consequences of these schemes can include denial of access to the accounts and assets of certain clients and even identity theft.”
It also says that foreign exchange markets generally can be risky. It says this segment of the financial markets “is complex and volatile. It is intended for investors who have the knowledge, time and resources to track it. Investors who do not have the knowledge and time needed to trade in this market could incur significant losses.”
And, the AMF warns investors about the risk of trading in binary options, which are often traded in forex markets, and “carry significant risks for the average investor.”