The Autorité des Marchés Financiers (AMF), the French regulator responsible for financial markets conduct, has issued a report summing up recent developments within its jurisdiction. The 2014 report includes data on complaints, as well as some details about the implementation of various actions by the body in 2014, mainly related to the implementation of MiFID rules.
Emphasizing on investor confidence, the regulator acknowledged that there has been a substantial increase in complaints in 2014. The AMF registered a total of 12,108 requests from professional and individual clients to assist them in dealing with regulated and unregulated financial services providers.
Complaints against binary options operators have increased 3-fold
Focusing on forex and binary options, the AMF reports only growth figures. Complaints against binary options operators have increased 3-fold, while in forex the amount has risen by 42 percent.
As a result, in October the regulatory body launched an online educational campaign in order to inform the public about the risks in dealing with questionable brokers. It also regularly updates its list of unregulated companies which are known to provide low-quality financial services in the country (namely binary options and forex providers).
The mediation division of the AMF which facilitates resolution of complaints closed 969 cases in 2014, 506 of which were within its competence. The regulator shared in its communique that a large number of those were related to forex trading.
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President of the AMF, Rameix Gerard, shared that the regulator remained on track with its 4-year strategic effort to “give a new meaning to finance.” While the nominal quantity of complaints from binary options and forex investors is still small, repercussions for the wider industry could include additional and unnecessary scrutiny.
As is usually the case, in their efforts to prevent abusive parties from targeting local customers, the regulators could overreach and hamper the business of legitimate operators.
Binary options scams have become a regular case with a number of brands falsely misleading individuals to open accounts to trade binary options. Finance Magnates’ reporters have been in contact with a number of victims of aggressive selling tactics. Clients have been solicited to deposit substantial sums only to lose them quickly or never be able to withdraw them due to attached bonus conditions.
According to rumors in the industry this was the reason for some binary options operators to get involved in criminal investigations.
If the operators of binary options companies want to stay in this business in the long run, it is in the interest of the whole industry to change the ways of a large number of white labels. Lately, we have seen a growing number of brands offering services in the U.S., which according to U.S. Commodity Futures and Trading Commission is an illegal activity.
The latter only increases the risks to the industry and opens the doors for the overarching arm of the U.S. law to seize banking accounts and launch investigations into the matter aggressively.