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MFSA WARNING
Notice addressed to the general public, namely to retail investors, regarding
the sale of speculative products [Contracts for Difference; Binary Options;
Forex and other speculative products] and their associated risks.
The Malta Financial Services Authority (“MFSA”) wishes to once again alert the general public,
in particular retail investors, regarding the high risks associated with investments in contracts for
difference, binary options, forex and other highly speculative products.
The European Securities and Markets Authority (“ESMA”) has stated that these type of products
give rise to investor protection concerns, mainly due to the marketing strategies of the firms selling
the products and the manner in which they are presented to retail investors who may not understand
their highly risky, complex and speculative nature. These products are often advertised via online
platforms and are sold without investment advice which has resulted in significant detriment and
loss to retail investors. Unauthorised and unregulated entities are also offering these products which
is of particular concern as it significantly increases the risk for investors who may become victims
of fraudulent scams.
The MFSA strongly advises investors and potential investors to exercise caution and be vigilant
when seeking to invest in these speculative products and to ensure that the provider is duly
authorised to offer services in relation to these products. Consumers should also seek professional
investment advice and ensure that they have thoroughly understood the risks involved prior to
investing in these complex instruments.
Communications Unit
Malta Financial Services Authority
MFSA Warning 02-2017
2nd March 2017