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AvaTrade pays €175,000 in settlement with Belgium’s FSMA

The Financial Services and Markets Authority (FSMA) has announced on Wednesday it has reached a settlement with Irish forex brokerage AvaTrade for a payment of EUR 175,000. According to the regulator, the broker has been providing financial services in Belgium without meeting all the legal requirements.

 

Specifically, FSMA says that AvaTrade has been offering CFDs to Belgium residents without the requisite prospectus, which must include complete information about the type of investment instrument, the issuer, and the risks associated with the investment. Besides, the regulator states that the broker did not submit for approval to the FSMA any advertisement or other documents relating to the said public offers.

 

AvaTrade is a major forex brokerage, whose units are regulated in Ireland, Australia and Japan. As it is regulated in the EU, AvaTrade is entitled to operate in all EU Member States, Belgium included. However, the situation with Belgium is a bit tricky, as FSMA banned the public marketing of OTC derivatives (CFDs and binary options) on August 18, 2016.

 

The announcement of FSMA’s website also outlines a settlement with binary options broker iCFD Ltd. that agreed to make a payment of EUR 200,000 to the commission for targeting Belgium investors.

 

In addition, both brokers are required to change information on their websites, indicating that their offering is not intended for Belgian residents. Besides, they have to contact all their Belgian clients to offer them discontinuance of their trading account and reimbursement of their current balance.

 

This is not the first case when Belgium’s financial regulator “punishes” a major forex broker for lack of prospectus. In April this year major brokerage Plus500 had to pay €550 000 in settlement for that reason.

 

 The Financial Services and Markets Authority (FSMA) is one of the harshest EU financial regulators. Apart from the ban of public marketing of OTC financial products introduced previous year, it regularly issues warnings against unregulated companies operating in the country. Most recently it warned against several boiler room scams.

TAGS: AvaTrade  FSMA  regulation 

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