MR No. 2017 - 41
2 October 2017
The FMA is participating in the initiative, run by the International Organization of Securities Commissions (IOSCO) to promote investor education and protection across six continents. The FMA is a member of IOSCO.
As part of the protection message, the FMA is highlighting the case of Diana  who lost US$5,000 (NZ$7000) after trading in unregulated binary options. Her case reflects many of the issues raised with the FMA by investors in this area, such as:
The FMA is reinforcing to investors in New Zealand that selling financial products by cold calling is illegal.
The FMA has licensed more than 200 financial services firms in New Zealand since 2013.
Paul Gregory, FMA Director of Investor Capability, said, “Baked into the FMA licensing process are some basic protections for investors. Investors should expect to be communicated to clearly about the benefits and risks of a product. They can complain to a dispute resolution service if they have any issues with a financial service provider. Licensing also means we are able to hold providers to account for the way they treat their customers.”
To gain a licence, businesses and individuals must meet a number of requirements including:
The FMA regularly receives complaints from consumers who have been caught out by slick websites and promises of high returns from offshore. These complaints centre on products like binary options and foreign exchange trading. Where an unlicensed, unregulated company based offshore withholds money from an investor, it is very hard for the FMA to help.
The FMA urges investors to do their homework. Don’t think a company is legitimate because their advertisement appears on what seems like a credible website. Before investing:
Ph: 021 702 036
 Diana* (not her real name) is an investor who contacted us in March 2017. The company involved is based overseas and not licensed or regulated in New Zealand. The FMA issued a warning about the company in response to her complaint.
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