Portuguese Watchdog Warns Against AAFX CAPITAL

Portugal’s watchdog confirmed that registration under its laws is required in principle, even for overseas operators

Portugal’s securities watchdog authority, Comissão do Mercado de Valores Mobillários (CMVM), today reminded the public to exercise caution when dealing with affiliates or introducing brokers of unregulated FX companies. In an advisory, the CMVM warned locals against AAFX CAPITAL, which operates its FX and CFDs business based from an undisclosed jurisdiction and without a regulatory permit.

Per the latest regulatory warning, AAFX CAPITAL is not authorized under the Portuguese Securities Code (Approved by Decree-Law No. 486/99) to provide investment and ancillary services in the country. These services include the prospecting and advising on investments and dealing in financial instruments, such as stocks and shares, bonds, derivatives, and instruments like forex.

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Portugal’s watchdog confirmed that registration under the aforementioned act is required in principle, even for overseas operators offering financial instruments for residents, or making transactions on their behalf as counterparties.

The watchdog has also alerted investors against other FX brands, most of which are offshore brokers that operate in a loose regulatory environment.

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The CMVM explained that both types of operators, IB or execution brokers, should implement and maintain appropriate measures to ensure compliance of all applicable rules and regulations.

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Portuguese authority also warned of a new generation of unchecked traders that are using flashy social media profiles to trick victims into thinking they can trade online and make thousands in no time. It referenced Instagram profiles of pro-claimed traders that post pictures of jet-setting lifestyle, including sports cars that they gained from trading in currencies and claim customers can do the same if they ‘follow their signals’.

While these bogus profiles advertise get-rich-quick schemes, they do not even have a website and operate solely on social media channels, including Instagram, Facebook, or WhatsApp.

However, these traders do not have the necessary accreditation or qualifications to offer these services, though they promise very lucrative and guaranteed returns. All fake promises tend to stop after victims have invested some money and received their first round of profits, the CMVM warns.

The agency noted that the information used in the warnings was obtained from solicitation materials, and therefore, may be inaccurate. The CMVM recommends that all investors consult its website before conducting or engaging in any investment activities with companies in order to see if they are authorized to provide investment services in Portugal.

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