Israel’s financial markets and services regulator, the Israel Securities Exchange (ISA), has fined NIS150 000 (around $42 000) Atrade – the local unit of Irish forex broker AvaTrade – for “misleading advertising”.
According to the site Finance Magnates, quoting ISA, the problem was with a video ad suggesting that a regulation guarantees safety for clients and that Atrade is much safer, after it got an ISA trading arena license. The message went along like this: “it is safer to trade with Atrade now as it has received an Israeli trading arena license of the ISA.”
Despite it being generally true that dealing with properly regulated brokers is safer than with unregulated, or ones holding flimsy licenses like the one handed out by offshore zones like Vanuatu, the Seychelles and Saint Vincent and the Grenadines, for instance, it seems Atrade chose its words incorrectly and conveyed the wrong message.
ISA notes that as per the regulations, misleading advertising is forbidden, but took some mitigating factors in deciding on the size of the fine.
Atrade was set up by AvaTrade as a separate entity last April in order to meet Israel’s then new regulatory requirements. The subsidiary’s trading conditions are somewhat different: it offers lower leverage than the parent company, in compliance with ISA’s restrictions and does not hand out gifts or bonuses to clients. Atrade got its Israeli trading arena license in September 2016.