The U.K. Financial Conduct Authority has issued two warnings on Wednesday, highlighting for investors two companies that are violating the existing regulatory framework. Both firms have been soliciting clients from the U.K. and have been engaged in illegal provision of financial services.
The first company is TFX Traders which is operating via its website www.tfxtraders.com. The firm is providing binary options trading but is calling the product by a different name. Directional trading options are provided through an “ECN approved” platform, which the company is advertising as a credible verification.
The firm is attempting to mislead investors that it is offering a legal product and claims to be located in the U.K. The company’s info pages are full of spelling and language errors such as “Trading Directional Trade Options has some risks of partial or loss of full funds.”
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TFX Traders has to be authorized by the FCA in order to provide its services and from the data provided on its website we can deduce that the company is not supervised by any regulator.
The other company in today’s FCA bulletin is a clone of the FCA regulated firm RK Capital Management LLP. The website www.rkcapitalmanagement.net does not pertain to the supervised firm and claims to be allowed to provide financial services in the U.K.
Clone companies and unregulated binary options brokerages have been actively engaged in soliciting clients from the European Union and beyond and soliciting them to deposit funds with them. The main problem stemming from the actions of similar companies is that the whole industry is suffering from the regulatory and consumer outcry.
The Financial Conduct Authority is urging clients of unregulated firms and companies whose websites have been cloned to contact the U.K. watchdog.