New Zealand’s Financial Markets Authority (FMA) has flagged some of the advertising statements used by Rockfort Markets, a licensed derivatives issuer, and ordered it to remove or amend the misleading statements.
Rockfort Markets, which offers trading services with CFDs in forex, shares and several other asset classes, failed to present a balanced view of the risks on derivatives trading, according to the Kiwi regulator.
Furthermore, the Auckland-based company stated on its website that it “exceeds the requirements of the Legislation and keeps separate client money from our operating money.” However, the regulator clarified that these are mandated requirements that all derivative issuers should follow.
Additionally, the FMA questioned that the phrase regulated ‘forex and share broker’ while the company gained the license as a derivatives issuer. Moreover, the regulatory requirements need licensed entities to add a prominent Product Disclosure Statement, which Rockfort failed to include in certain advertisements.
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“The FMA considered that Rockfort’s materials were likely to breach the FMC Act, specifically the ‘fair dealing’ provisions and advertising requirements for regulated offers,” the regulator stated.
The Company Complied with the Regulations
The company was informed by the regulator about the lapses, which already amended or removed the misleading statements.
The regulator’s direction order was issued following initial concerns raised by the FMA with Rockfort, which previously only partially addressed the issues.
“We considered an order and public statement was appropriate and proportionate, given our earlier engagement with Rockfort did not fully address our concerns,” said James Greig, FMA Director of Supervision. “We have a range of options to deal with poor conduct and by naming the firm, we want to reinforce our expectations around misleading advertising materials, particularly in the high-risk derivative sector.”