The National Securities Market Commission (CNMV) has issued a series of warnings, alerting investors to the potential risks associated with entities operating without proper registration and utilizing specific domain names for their activities.

CNMV Alerts Investors to Risks Associated with Unregistered Operators

The unregistered entities include:

1. alfatraders.pro- ALFA TRADERS, ALFA TRADE
2. algotrust.trade- ALGO TRUST LLC
3. gecruxinvest.io- GECRUX INVEST, BAMBOOZLE GROUP LTD
4. invox.trade- INVOX TRADE
5. tangent-capital.pro- TANGENT CAPITAL

CNMV, the regulatory authority responsible for overseeing the securities market in Spain, has confirmed that these entities are not registered in the corresponding registry, and as a result, they lack the necessary authorization to provide investment services or engage in activities subject to CNMV's supervision.

Investors and the general public are urged to exercise caution and diligence when dealing with entities using these domain names, as their unregistered status may pose potential risks. CNMV emphasizes the importance of verifying an institution's registration status before entering into any financial transactions.

To assist investors in confirming the legitimacy of financial institutions using these domains, CNMV offers a search engine on its official website and encourages individuals to contact its investor service to verify the registration status of any entity. Additionally, CNMV has provided an inquiry form and an infringements communication channel for reporting investment service offers from unregistered entities using the mentioned domains.

Warnings from #CNMV on unregistered institutions: https://t.co/kGTjJv4XuA

— CNMV (@CNMV_MEDIOS) October 30, 2023

Spanish Regulator Set to Implement Stricter CFD Restrictions

Finance Magnates reported earlier that CNMV was poised to introduce enhanced regulations governing the marketing, distribution, and sales of contracts for difference (CFDs) instruments. These additional measures, set to take effect from July 20, 2023, were deemed "justified and proportionate" by the European Securities and Markets Authority (ESMA), which disclosed the development.

The first segment of the new restrictions builds upon regulations introduced by the CNMV in 2019 and ESMA in 2018. It prohibits marketing communications and practices aimed at retail clients or the general public. This includes the use of sales agents, call centers, or software providers to recruit investors. Furthermore, the sponsorship of events and organizations, as well as the use of public figures to promote CFDs, is banned.

The second part of the enhanced regulations covers the marketing, sale, and distribution to retail clients of certain "leveraged products," including particular types of futures and options. Providers of these high-risk products will be required to close one or more of a retail client's open positions when the position value is reduced to half of the initial margin.

Turbo products, similar to CFDs and leveraged derivatives that allow investors to profit from underlying asset movements, are excluded from these regulations when the total risk is equal to the amount invested.

The CNMV's decision to implement these additional restrictions follows a public consultation conducted in November of the previous year. The regulator highlighted that previous restrictions introduced in 2019 had limited effectiveness in terms of investor protection. Notably, roughly 75% of retail investors continue to suffer losses on their CFD investments, even as a significant portion of CFD distribution in Spain is conducted by entities with passports from other EU member states.

These additional regulations are a response to brokers' aggressive advertising campaigns that sometimes bypass due authorization and attract investors through mass call centers and other methods that circumvent existing restrictions. The CNMV has previously mandated risk warnings for providers offering leverage higher than 1:10, ensuring that retail clients are informed of the potential risks associated with trading in leveraged products.