As the UK’s Financial Conduct Authority continues to issue warnings against unregulated brokers, across the globe in Japan, the Kanto Local Finance Bureau (KLFB), an offshoot of the Ministry of Finance, is doing the same. The local regulator issued a series of cautionary notices today, notably warning against trading with two FX brokers.
The first company listed by the regulator today is FX Mate. The FX broker is located in that hotbed of business activity – Gambia. FX Mate says that it has regulatory approval from the Gambian Enterprise Zone. Whether this constitutes a stamp of approval from the Gambian authorities is unclear.
The KLFB did note that this may not be the actual address of the company but why anyone would bother to fake an address in Gambia is beyond this author. If brokers are going to make up addresses in foreign countries, they should at least follow the example of companies such as Options Stars Global and open an ‘office’ in an exotic country like Samoa.
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It seems that FX Mate may have already seen the warning issued by Japanese regulators today. At the bottom of the site’s homepage, it lists a number of jurisdictions that it does not provide broker services to. Someone has then clearly tacked on another sentence, saying that the broker does not intend to provide services to Japan. That is strange given the site is only accessible in two languages, English or Japanese – the firm must be catering to that wide and well-known audience of non-Japanese Japanese speaking FX traders.
Not so simple
The KLFB also confirmed that SimpleFX is targeting the Japanese market despite not having regulatory approval to do so. SimpleFX is registered in Saint Vincent and the Grenadines – a series of Caribbean islands and not a 1970s funk band – but whether the company owners actually reside there is unclear.
The broker also lists numbers in the UK but doesn’t appear to actually have an office there. As with other bogus brokers, the phone numbers are intended to give the impression that the company has a presence in a more ‘respectable’ country when it almost certainly doesn’t.
Today’s warning shows the growing efficacy of efforts by regulators to clamp down on unregulated FX brokers. Regulators can certainly be infuriating but in instances such as this, it is hard to condemn their behavior.