Canada’s British Columbia Securities Commission (BCSC) today issued an investor alert warning residents of the province to exercise “extreme caution” when considering whether to invest with a lesser-known forex brand called ‘FCOEX.’
Most warnings of this type involve unauthorized advertising to or contact with retail investors in Canada by unlicensed brokers, and this one is no different.
Although FCOEX is not registered to trade in securities or exchange contracts in BC or anywhere else in Canada, the BCSC became aware that a British Columbia resident had been solicited by a representative of this broker, and was able to open and fund a trading account.
FCOEX offers clients a range of financial services through a contracts for difference (CFDs), forex, and options trading platform. A glance at the website in question also reveals that the brokerage provides no confirmation regarding licenses held at any global jurisdictions, either, which raises a red flag as far as investors are concerned.
After briefly explaining certain risks related to derivatives products, the provincial authority noted that while some trading activities are regulated, these represent only a portion of the market, while a large portion is illegally traded through unregulated online platforms.
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Concerns about bad actors and high-risk investments
BCSC alert further states that while some companies follow through on their regulatory requirements, some do not and that some companies are purely scams for speculative trading.
The BCSC maintains an investment caution list to alert investors of unregistered securities activity and unqualified investments promoted in British Columbia and encourages the public to report these kinds of activities to the respective regulators.
In issuing this alert, the BCSC joins other regulators around the world that have rung alarm bells about unregulated FX and CFDs brokers in an effort to encourage investors to scrutinize investment products carefully.
On the cryptocurrency front, the Canadian watchdog has voiced increased concerns about bad actors and high-risk investments in the virtual assets space. The BCSC also responded with increased efforts to educate investors about the potential dangers of cryptocurrency investments.
The BCSC is the independent provincial government agency responsible for regulating securities trading in British Columbia through the administration of the Securities Act. The regulator website provides information, tools, and resources for investors, including investor warnings about individuals and companies that appear to be engaging in unauthorized activities.