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New Zealand’s watchdog, the Financial Markets Authority (FMA), has ordered the local Cambrian Corporation Limited, which offers forex signals and education, to change its marketing materials. According to the FMA, they are misleading or deceptive and are making unsubstantiated statements about the company services.
In FMA’s opinion, Cambrian breached two provisions of the Financial Markets Conduct Act (FMC Act) and the watchdog has ordered Cambrian to change its marketing materials and website and bring them in line with the FMC Act.
The company must balance the dominant message that forex trading is an easy way to profit from financial markets by adding information that it is a risky endeavor and requires an effort to actively manage positions. Cambrian must clearly state that forex trading is not a reliable source of quick, consistent and substantial profits and that returns are volatile.
The FMA also orders Cambrian to ensure that the statements in its marketing materials that its services are in relation to short-term (ie spot or intra-day) foreign exchange trading, not trading of derivatives (as defined in the FMC Act) and ensures that any statements, examples or charts relating to profit or success are consistent with this. Any charts, tables, diagrams, numerical or graphical representations must not be misleading and Cambrian must not imply that the customer can trade like a professional by using its services.
“From the clients we interviewed and trades we analysed, the FMA did not find any evidence that Cambrian’s strategy resulted in the claimed returns,” said Liam Mason, FMA’s director of regulation, and added that Cambrian’s clients will have the opportunity to consider whether they were misled and seek recovery of any losses on that basis.
The company also must prove the compliance of its new marketing materials to the FMA and inform all its clients, past and present, of the watchdog order. Cambrian has five working days to do so.
In a comment for the Finance Magnates website, Jade Lynn, managing director of Cambrian said she is disappointed with FMA’s decision and does not entirely agree with its analysis methods and conclusions, but the company will nevertheless comply with the order.
Cambrian is based in New Zealand and offers signals and educational materials and training on forex trading.