The Australian Securities and Investments Commission (ASIC) published, through its consumer website MoneySmart.gov.au, warning notices against unlicensed binary options brokers FM Trader and RTG Direct Trading. The regulator noted two two companies could be involved in a scam and advised all traders to not engage with them.
Neither FM Trader (www.fmtrader.com) nor RTG Direct Trading (www.rtgtrading.com) are registered or regulated as financial service providers in Australia, the ASIC said. Despite this, both entities have contacted, through calls or emails, local investors and offered them their services.
On their websites, both entities offer trading in binary options on currencies, commodities, indices, and stocks. FM Trader, a brand of FM Marketing LT, is based in Belize and is licensed by the Financial Services Commission (IFSC), while RTG Direct Trading provides no information regarding licensing or authorization.
In late April, the Manitoba Securities Commission (MSC), the financial regulatory body of the Canadian province of Manitoba, also issued a warning against Financial Market Trader, or FMTrader, for operating without being authorized or licensed.
In binary options trading, investors guess whether the price of a certain instrument would go upwards or downwards within a pre-determined time frame. Once the time is up, the option is deemed expired and the bet is settled. Depending on the outcome, a trader either collects a profit, or loses money. Due to its high-risk nature, binary options trading is not allowed in some legislation, while in others it is strictly regulated.
Although this type of trading is not forbidden in Australia, all financial investment companies, including forex and binary options brokers, are not allowed to target local citizens without a local license. Investors who engage with unregulated brokers put their funds at risk. The regulator maintains a register with all authorized entities and regularly issues warnings against unauthorized entities.
We strongly advise you to only deal with regulated forex brokers, authorized by reputable regulatory bodies like CySec, FCA, and CFTC/NFA, among others.
Source: Money Smart