Australian Watchdog Fines XForex for Misleading Advertising
- The payment of the infringement notices penalties is not an admission of a contravention of the ASIC Act consumer protection provisions.
The Australian Securities and Investments Commission (ASIC ASIC The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the Read this Term) reported that the firm operating the local XForex brand, O.C.M. Online Capital Markets Pty Ltd (OCM), was hit with $30,600 in penalties after the ASIC issued three infringement notices for false or misleading online advertising.
The advertisements and emails in question promoted OCM's FX and CFDS offering by making a number of claims about the advantages of using its financial service including "$2533 in Just 7 Days!" and "Learn how you can increase your monthly income".
The watchdog says it believed that the advertisements and emails were misleading because: they gave the impression that OCM's service could be relied upon to provide substantial profits quickly and to consistently increase one's monthly income; they did not adequately convey that trading in margin FX derivatives and CFDs is high risk, provides volatile returns and does not guarantee consistent profits; and while they referred to risks and contained disclaimers, these messages were in fine print and were ineffective to correct the dominant message created by the headline claims.
ASIC Commissioner Greg Tanzer said: ''Margin foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and derivative trading is high risk and gives volatile returns. Consumers should not be misled by false claims about the level or consistency of returns achievable from such trading.'
The payment of the infringement notices penalties is not an admission of a contravention of the ASIC Act consumer protection provisions by OCM. The watchdog can simply issue an infringement notice where it has reasonable grounds to believe a firm has contravened certain consumer protection laws. Its regulatory powers are set to further increase in 2016, in a manner that will affect the margin FX and OTC derivative industry quite substantially.
The Australian Securities and Investments Commission (ASIC ASIC The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the Read this Term) reported that the firm operating the local XForex brand, O.C.M. Online Capital Markets Pty Ltd (OCM), was hit with $30,600 in penalties after the ASIC issued three infringement notices for false or misleading online advertising.
The advertisements and emails in question promoted OCM's FX and CFDS offering by making a number of claims about the advantages of using its financial service including "$2533 in Just 7 Days!" and "Learn how you can increase your monthly income".
The watchdog says it believed that the advertisements and emails were misleading because: they gave the impression that OCM's service could be relied upon to provide substantial profits quickly and to consistently increase one's monthly income; they did not adequately convey that trading in margin FX derivatives and CFDs is high risk, provides volatile returns and does not guarantee consistent profits; and while they referred to risks and contained disclaimers, these messages were in fine print and were ineffective to correct the dominant message created by the headline claims.
ASIC Commissioner Greg Tanzer said: ''Margin foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and derivative trading is high risk and gives volatile returns. Consumers should not be misled by false claims about the level or consistency of returns achievable from such trading.'
The payment of the infringement notices penalties is not an admission of a contravention of the ASIC Act consumer protection provisions by OCM. The watchdog can simply issue an infringement notice where it has reasonable grounds to believe a firm has contravened certain consumer protection laws. Its regulatory powers are set to further increase in 2016, in a manner that will affect the margin FX and OTC derivative industry quite substantially.