A cold-calling operation promoting FX and binary option products to investors worldwide has agreed to stop contacting Australian investors following ASIC concerns.

The outcome is part of ASIC’s ongoing work in the retail OTC derivative space.

FXTS Guru claimed on its website (www.fxts.guru) it makes up to 3000 calls a day to investors across 40 countries, including Australia, promoting its products and then supplying investors’ contact details to its clients - various FX and binary option issuers.

ASIC raised concerns with FXTS Guru because FXTS Guru was and is not licensed to provide financial services in Australia. In addition, none of FXTS Guru’s listed clients were licensed to provide financial services in Australia.

Following these concerns, FXTS Guru has agreed to cease contacting Australian resident investors and has also agreed to change the information on its website to remove references to Australia.

ASIC Commissioner Cathie Armour said, ‘Investors need to be extremely wary of any unsolicited calls encouraging them to deal in financial products, especially products such as margin FX and binary options which are complex and risky.

‘Always do your own research on a company or individual before you deal with them. You should also seek independent professional or legal advice to ensure you fully understand the products and services being offered and the various risks associated with them.’

Background

Consumers can check if a company or individual is appropriately licensed or authorised by searching ASIC’s Professional registers. ASIC’s Moneysmart website also provides useful information on how to avoid scams

Margin FX and binary options are considered to be financial products in Australia as they are classified as derivatives. An entity doesn’t have to be the one issuing the FX or binary options products to require an Australian financial services (AFS) licence. The mere fact an entity encourages people to consider forex and binary option trading can be enough.

Outcomes in the retail OTC derivative space

Product distribution and financial market innovation and complexity, which includes the retail OTC derivative space, has been identified as a focus area for ASIC. Recent outcomes include:

• following ASIC concerns, FX Primus agreeing to make changes to its websites and to notify its Australian clients that it is not licensed to provide them with financial services (refer: 15-120MR).
• Cancelling the AFS licence of FX provider Rainbow Legend Group Pty Ltd for failing to comply with its obligations and making false and misleading statements. (refer: 15-108MR)
• Cancelling the AFS licence of four licensees for failing to lodge annual statements (refer: 15-100MR)
• following an investigation, Advanced Markets agreeing to change potential misleading statements on its website (refer: 15-085MR)
• following an investigation, suspending the AFS licence of FX provider AGM Markets Pty Ltd (AGM) (refer: 15-075MR)
• warning investors not to deal with Grandegoldens (refer: 15-066MR). It is not licensed to trade in margin FX in Australia.
• cancelling Enfinium’s AFS licence because, among other things, concerns around inadequate risk management systems (refer: 15-026MR)
• warning investors against dealing with unlicensed binary option provider Opteck.com (refer: 15-024MR)
• following a surveillance, Calibre Investment changed the way it offers FX services to retail clients (refer: 14-327MR)
• restraining Monarch FX and its former director and general manager, Quinten Hunter, from carrying on a financial services business (refer: 14-342MR)
• shutting down Vault Market and removing its sole director, Mr MD Anamul Amin, from the financial services industry (refer: 14-309MR)
• warning investors not to deal with YoutradeFX (refer: 14-306MR). It is not licensed to trade in margin FX in Australia.
• Pepperstone agreeing to stop providing financial services in Japan following inquiries by ASIC that revealed they were not licensed by the Japanese Financial Services Agency (refer: 14-267MR)
• cancelling the AFS licence of online FX broker Global Derivative Services after an investigation found it failed to comply with a number of its licence obligations (refer: 14-226MR)
• accepting an enforceable undertaking from online FX broker Forex Financial Services prohibiting it from operating managed discretionary accounts (refer: 14-036MR)
• banning Robert Lloyd Wilson from providing financial services and warning the public against dealing with him for his promotion of a program that showed ‘when to get in and when to get out’ of trades. These trades included, among other things, FX trades (refer: 13-282MR).

ASIC has also issued a more general warning to retail investors about the dangers of FX trading (refer: 13-283MR).