The Comision Nacional del Mercado de Valores (CNMV), the financial regulatory body of Spain, today warned investors against being offered products and services from two unregistered companies that are illegally conducting financial services targeting the country’s residents.
The financial watchdog today updated its warning list by blacklisting MT4Invest which is currently operating through the website http://www.mt4invest.com. The FX and CFDs broker OEXgroup, operating as www.oexgroup.com, was also added to the Spanish regulator’s caution list. The CNMV recommended in a statement that investors should avoid trading with both brands as they are not authorised to provide the investment services detailed in Article 140 of the Securities Markets Law, nor the auxiliary services.
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Although the financial watchdog didn’t provide specific details, the inclusion of both entities means they are not officially registered in Spain and were thus not authorized to offer trading services to local traders.
The two brokers have been previously listed as trading scams or unregulated entities by other European financial regulators. This is why the CNMV advises Spanish investors to check its registers before they deposit any fund with a broker, especially if the related broker used aggressive marketing techniques.
Earlier in March, the CNMV issued a circular setting a host of new rules regarding trading costs and risks disclosure, leverage and advertising requirements. In essence the new guidance concerns companies that offer forex, contracts for difference (CFDs) and other speculative products such as binary options among retail investors in Spain.
More specially, the CNMV notes that brokers offering ‘excessive leverage’ greater than 10:1 need to explicitly warn investors that it believes that such products are not appropriate for retail investors due to their complexity and the risks involved.