ARTICLE CFD brokers hiding behind Terms and Conditions

ARTICLE  CFD brokers hiding behind Terms and Conditions

Investment opportunities? Easy money? Contracts for Differences? 

___

How do shady brokerages make profits?

Can defrauded investors take legal actions?

DEFINITELY!

___

You might have invested in forex, gold or some other investment opportunity through an unreliable securities dealer and ultimately lost money. Or if not, you must have heard about people losing money to a brokerage. 

In our experience, investors who partner with an unreliable brokerage company get defrauded all over the world on a daily basis. The fraud victims are in all likelihood less experienced traders. The more investors take time to learn about the process and do their due research beforehand, the less they are likely to be engaged in trading through vague brokerages.  
No matter what you do for living, you have probably seen an ad promoting investment in forex, crypto, gold or other securities from a company you have never or barely heard of or seen while scrolling on your social media platforms. These kind of companies point out an easy registration and conditions that seem too good to be true, calling attention to multiple investing opportunities. If you decide to invest, there is a big chance that you will end up trading mainly through instruments called Contracts for Differences (CFDs). 

A CFD is a legally binding financial contract between an investor and a broker that defines payments of the differences in the settlement between the open and closing trade prices. 


CFDs also allow investors to get involved in directional trading of securities. This means that investors make assessments of the direction based on their view of the future direction of the market.  Such assessment is the sole determining factor in whether the investor decides to sell or buy. CFDs are particularly popular in forex (FX) and commodities products.
Therefore, CFD investors do not own the asset in question, but rather receive revenue based on the price change of that asset within the established timeframe. For example, instead of buying or selling actual gold, traders simply speculate on whether the price of gold will go up or down. If traders are successful at the assessment, they earn profits, and if not, they lose the invested money. The CFD’s value considers only the price fluctuations, i.e. the difference between the opening and closing trade price.

Investing companies who act as brokers offer investment advice to their clients and “manage” the invested money. Given such position and the expertise surpassing that of a client, it is a very common occurrence that clients get defrauded. The fraud victims are mostly clients who have little experience in trading and trust their brokers to help them on the journey, yet quite often they do just the opposite. Vague investing companies use clients’ downfall to get the profits. 
When defrauded clients learn they have been scammed and want to put an end to it, in most cases they address the investment company with the request to have their money returned and the brokerage gives a negative response referring them to the Terms and Conditions. Since the clients had ticked the boxes as a sign of consent, they often believe there is nothing left to do.
However, such terms and conditions are many a time contrary to binding regulations. We have observed on  websites of a few investing companies we shall not name that every advice given is considered to be a promotional material, which is contrary to the very essence of trading. Yet, as per our experience, it seems that those companies have a little to no regard for the regulations they fall under. 

Therefore, the key question here is

Can an investment company hide behind its terms and conditions contrary to binding regulations regarding CFDs?

And the answer is

NO, IT CANNOT!


The regulations governing CFDs are established by regulatory bodies, such as the Financial Conduct Authority (FCA) in the UK, the Securities and Exchange Commission (SEC) in the US, or the Cyprus Securities and Exchange Commission (CySec) which is also eligible for many EU countries. These regulations must be followed by investment companies operating in respective jurisdictions.
While investment companies may have their own terms and conditions for the CFD products they offer, those cannot contravene or override the regulations set out by the relevant regulatory body. If that is the case, the regulatory requirements take precedence.


Lastly, it is important for investors to understand the terms and conditions of any investment product they are considering, including CFDs, and ensure that these comply with applicable regulations. Even if they accepted them, it does not mean the investment company is not liable for breaching mandatory regulations. If an investor or a trader has concerns about practices of a certain investment company, they can contact the relevant regulatory body and experts for assistance. Legal actions can be taken!

 

 

Authors:

Miloš Vučković, Senior and Managing Partner

Aleksandar Čermelj, Associate

 

*The information in this announcement does not represent legal advice and is provided for general informational purposes only.

**Partner, Senior Associate and Associate refers to Independent Attorney at Law in cooperation with IVVK Lawyers.


 

29/03/2023

SHARE the NEWS on :

PREVIOUS

PREVIOUS

Corporate Sustainability Due Diligence Directive: Navigating Trough the Turmoil

PREVIOUS

PREVIOUS

Jurisdiction for Issuing Construction Permits

PREVIOUS

PREVIOUS

EU Minimum Corporate Income Tax Directive: What to Know and What to Expect?

PREVIOUS

PREVIOUS

Marking Data Protection Day: A Reminder of How Important it Is to Protect Privacy

PREVIOUS

PREVIOUS

Drag Along and Tag Along in Domestic Legal System

PREVIOUS

PREVIOUS

AI Act - Challenges of Artificial Intelligence To the Global Market

PREVIOUS

PREVIOUS

Understanding NPLs: Scheme, Serbian Context & Notes of Economists

PREVIOUS

PREVIOUS

Insurance – Luxury or Necessity?

PREVIOUS

PREVIOUS

Claims Secured by a Mortgage and the Statute of Limitations

PREVIOUS

PREVIOUS

Alert: New Regulation Concerning Incentives in the Hotel Industry

PREVIOUS

PREVIOUS

Most Profitable Investments In The Republic Of Serbia

PREVIOUS

PREVIOUS

Annex to the Employment Contract for Transfer to Another Suitable Job (Due to the Needs of the Work Process and Organization)

PREVIOUS

PREVIOUS

Delayed justice is denied justice

PREVIOUS

PREVIOUS

Regulation of the Government of the Republic of Serbia on electricity delivery and supply conditions: Outlining the conditions for connection to the grid

PREVIOUS

PREVIOUS

Shareholders agreement – General overview and important clauses

PREVIOUS

PREVIOUS

Serbia drafting new Law on Information Security

PREVIOUS

PREVIOUS

IVVK Lawyers becomes part of the LexQuire family

PREVIOUS

PREVIOUS

Serbia looking for strategic partners for solar power plants

PREVIOUS

PREVIOUS

ARTICLE Benefits of employee stock ownership plan in Serbia

PREVIOUS

PREVIOUS

In 5 years 450 new RES power plants in Serbia

PREVIOUS

PREVIOUS

ARTICLE Co-ownership of share in Serbia

PREVIOUS

PREVIOUS

Serbia hosts Specialised Expo 2027

PREVIOUS

PREVIOUS

ARTICLE Uncovering legal challenges of AI

PREVIOUS

PREVIOUS

Energy related Memorandum of Understanding signed with UK

PREVIOUS

PREVIOUS

Serbia established quota for solar power auctions

PREVIOUS

PREVIOUS

ARTICLE The dark side of ESG

PREVIOUS

PREVIOUS

ARTICLE ESG principles and their impact on corporate world

PREVIOUS

PREVIOUS

Serbia focuses on energy, IT and biotech

PREVIOUS

PREVIOUS

Serbian Orthodox Church becomes solar prosumer

PREVIOUS

PREVIOUS

Notary Chamber of Serbia releases E-Notary app

PREVIOUS

PREVIOUS

ARTICLE CFD brokers hiding behind Terms and Conditions

PREVIOUS

PREVIOUS

Process of company founding in Serbia goes electronic

PREVIOUS

PREVIOUS

Upward trend of renewables confirmed in 2022

PREVIOUS

PREVIOUS

ARTICLE Obtaining hemp cultivation permit in Serbia

PREVIOUS

PREVIOUS

ARTICLE Legal aspects of cultivation, trade and use of cannabis in Serbia

PREVIOUS

PREVIOUS

Serbia's 2023 economic growth depends on IT sector

PREVIOUS

PREVIOUS

ARTICLE Legal considerations of seasonal work engagements in Serbia

PREVIOUS

PREVIOUS

IVVK Lawyers hosted lecture for foreign business people

PREVIOUS

PREVIOUS

ICT sector recorded 2 billion EUR surplus

PREVIOUS

PREVIOUS

Growth of creative industries sector in Serbia

PREVIOUS

PREVIOUS

Serbia large biomass energy potential

PREVIOUS

PREVIOUS

Rich gold deposit found in Serbia

PREVIOUS

PREVIOUS

Serbia among top 3 global raspberry producers

PREVIOUS

PREVIOUS

Serbian Chamber of Commerce present in Dubai

PREVIOUS

PREVIOUS

Establishment of Serbia-Qatar Business Council

PREVIOUS

PREVIOUS

Serbia's Securities Commission approved establishment of a new AIF

PREVIOUS

PREVIOUS

Serbia adopted Air Quality Protection Program 2022-2030

PREVIOUS

PREVIOUS

Danube region transnational cooperation program 2021-2027 approved

PREVIOUS

PREVIOUS

Rakija entered UNESCO-s Intangible Cultural Heritage of Humanity List

PREVIOUS

PREVIOUS

Possible electricity import from Azerbaijan

PREVIOUS

PREVIOUS

Serbia's unique solar energy storage solution

PREVIOUS

PREVIOUS

Serbia abundant in rare minerals

PREVIOUS

PREVIOUS

Luxury Real Estate Market in Montenegro

PREVIOUS

PREVIOUS

LexQuire meets IVVK Lawyers

PREVIOUS

PREVIOUS

ARTICLE Law on Agency Employment aimed at prevention of labor abuse

PREVIOUS

PREVIOUS

11 cities and municipalities signed a Memorandum of Understanding

PREVIOUS

PREVIOUS

Price increase of housing units in Montenegro by 40%

PREVIOUS

PREVIOUS

Foreign trade in goods increased by 35.1%

PREVIOUS

PREVIOUS

ARTICLE Tax Incentives to Employers Who Hire Newly Registered Residents of Serbia

PREVIOUS

PREVIOUS

Apartments as the leading segment of the real estate market

PREVIOUS

PREVIOUS

Businessmen optimistic about the third quarter of 2022

PREVIOUS

PREVIOUS

Inflation in Serbia amounted to 12.8% in July

PREVIOUS

PREVIOUS

Bank fees and commissions to remain stable in 2023

PREVIOUS

PREVIOUS

ARTICLE Law on Alternative Investment Funds

PREVIOUS

PREVIOUS

Montenegro introduces auctions for renewable energy sources

PREVIOUS

PREVIOUS

ARTICLE Legal framework for investments in energy facilities in Serbia

PREVIOUS

PREVIOUS

Hydro Power Plants as a possible energy solution for Serbia

PREVIOUS

PREVIOUS

ARTICLE Four-day working week in Serbia

PREVIOUS

PREVIOUS

Crops estimations for 2022 in Serbia

PREVIOUS

PREVIOUS

ARTICLE Innovation clusters as high-potential solution for SMEs

PREVIOUS

PREVIOUS

Customs-free importing quotas for Eurasian Economic Community 2023

PREVIOUS

PREVIOUS

IVVK JOB OPENING We are hiring Junior Associates

PREVIOUS

PREVIOUS

Startups Attract More Than USD 135 Million to Serbia in 2021

PREVIOUS

PREVIOUS

Construction Plan for a Wind Farm in Bor

PREVIOUS

PREVIOUS

IVVK Lawyers participated in Confindustria HR Forum

PREVIOUS

PREVIOUS

IVVK-UpSkill Workshop "Presentation on social and TV media"

PREVIOUS

PREVIOUS

Serbia and Azerbaijan up for cooperation in the energy field

PREVIOUS

PREVIOUS

Energy permits digitized starting November

PREVIOUS

PREVIOUS

Belgrade declared city with greatest economic potential in region

PREVIOUS

PREVIOUS

Digitalization of fiscalization and invoicing in Serbia

PREVIOUS

PREVIOUS

New Register of Investment Locations in Serbia

PREVIOUS

PREVIOUS

Paysend opens new European tech center in Serbia

PREVIOUS

PREVIOUS

Serbia allows free export of flour from 15 May

PREVIOUS

PREVIOUS

Serbia to announce auctions for renewable energy power plants

PREVIOUS

PREVIOUS

Energy most important for economic development

PREVIOUS

PREVIOUS

Action Plan for Implementation of Digitalisation Programme in Health System

PREVIOUS

PREVIOUS

Oracle Corporation opens regional centre in Serbia

NEXT

NEXT

Corporate Sustainability Due Diligence Directive: Navigating Trough the Turmoil

NEXT

NEXT

Jurisdiction for Issuing Construction Permits

NEXT

NEXT

EU Minimum Corporate Income Tax Directive: What to Know and What to Expect?

NEXT

NEXT

Marking Data Protection Day: A Reminder of How Important it Is to Protect Privacy

NEXT

NEXT

Drag Along and Tag Along in Domestic Legal System

NEXT

NEXT

AI Act - Challenges of Artificial Intelligence To the Global Market

NEXT

NEXT

Understanding NPLs: Scheme, Serbian Context & Notes of Economists

NEXT

NEXT

Insurance – Luxury or Necessity?

NEXT

NEXT

Claims Secured by a Mortgage and the Statute of Limitations

NEXT

NEXT

Alert: New Regulation Concerning Incentives in the Hotel Industry

NEXT

NEXT

Most Profitable Investments In The Republic Of Serbia

NEXT

NEXT

Annex to the Employment Contract for Transfer to Another Suitable Job (Due to the Needs of the Work Process and Organization)

NEXT

NEXT

Delayed justice is denied justice

NEXT

NEXT

Regulation of the Government of the Republic of Serbia on electricity delivery and supply conditions: Outlining the conditions for connection to the grid

NEXT

NEXT

Shareholders agreement – General overview and important clauses

NEXT

NEXT

Serbia drafting new Law on Information Security

NEXT

NEXT

IVVK Lawyers becomes part of the LexQuire family

NEXT

NEXT

Serbia looking for strategic partners for solar power plants

NEXT

NEXT

ARTICLE Benefits of employee stock ownership plan in Serbia

NEXT

NEXT

In 5 years 450 new RES power plants in Serbia

NEXT

NEXT

ARTICLE Co-ownership of share in Serbia

NEXT

NEXT

Serbia hosts Specialised Expo 2027

NEXT

NEXT

ARTICLE Uncovering legal challenges of AI

NEXT

NEXT

Energy related Memorandum of Understanding signed with UK

NEXT

NEXT

Serbia established quota for solar power auctions

NEXT

NEXT

ARTICLE The dark side of ESG

NEXT

NEXT

ARTICLE ESG principles and their impact on corporate world

NEXT

NEXT

Serbia focuses on energy, IT and biotech

NEXT

NEXT

Serbian Orthodox Church becomes solar prosumer

NEXT

NEXT

Notary Chamber of Serbia releases E-Notary app

NEXT

NEXT

ARTICLE CFD brokers hiding behind Terms and Conditions

NEXT

NEXT

Process of company founding in Serbia goes electronic

NEXT

NEXT

Upward trend of renewables confirmed in 2022

NEXT

NEXT

ARTICLE Obtaining hemp cultivation permit in Serbia

NEXT

NEXT

ARTICLE Legal aspects of cultivation, trade and use of cannabis in Serbia

NEXT

NEXT

Serbia's 2023 economic growth depends on IT sector

NEXT

NEXT

ARTICLE Legal considerations of seasonal work engagements in Serbia

NEXT

NEXT

IVVK Lawyers hosted lecture for foreign business people

NEXT

NEXT

ICT sector recorded 2 billion EUR surplus

NEXT

NEXT

Growth of creative industries sector in Serbia

NEXT

NEXT

Serbia large biomass energy potential

NEXT

NEXT

Rich gold deposit found in Serbia

NEXT

NEXT

Serbia among top 3 global raspberry producers

NEXT

NEXT

Serbian Chamber of Commerce present in Dubai

NEXT

NEXT

Establishment of Serbia-Qatar Business Council

NEXT

NEXT

Serbia's Securities Commission approved establishment of a new AIF

NEXT

NEXT

Serbia adopted Air Quality Protection Program 2022-2030

NEXT

NEXT

Danube region transnational cooperation program 2021-2027 approved

NEXT

NEXT

Rakija entered UNESCO-s Intangible Cultural Heritage of Humanity List

NEXT

NEXT

Possible electricity import from Azerbaijan

NEXT

NEXT

Serbia's unique solar energy storage solution

NEXT

NEXT

Serbia abundant in rare minerals

NEXT

NEXT

Luxury Real Estate Market in Montenegro

NEXT

NEXT

LexQuire meets IVVK Lawyers

NEXT

NEXT

ARTICLE Law on Agency Employment aimed at prevention of labor abuse

NEXT

NEXT

11 cities and municipalities signed a Memorandum of Understanding

NEXT

NEXT

Price increase of housing units in Montenegro by 40%

NEXT

NEXT

Foreign trade in goods increased by 35.1%

NEXT

NEXT

ARTICLE Tax Incentives to Employers Who Hire Newly Registered Residents of Serbia

NEXT

NEXT

Apartments as the leading segment of the real estate market

NEXT

NEXT

Businessmen optimistic about the third quarter of 2022

NEXT

NEXT

Inflation in Serbia amounted to 12.8% in July

NEXT

NEXT

Bank fees and commissions to remain stable in 2023

NEXT

NEXT

ARTICLE Law on Alternative Investment Funds

NEXT

NEXT

Montenegro introduces auctions for renewable energy sources

NEXT

NEXT

ARTICLE Legal framework for investments in energy facilities in Serbia

NEXT

NEXT

Hydro Power Plants as a possible energy solution for Serbia

NEXT

NEXT

ARTICLE Four-day working week in Serbia

NEXT

NEXT

Crops estimations for 2022 in Serbia

NEXT

NEXT

ARTICLE Innovation clusters as high-potential solution for SMEs

NEXT

NEXT

Customs-free importing quotas for Eurasian Economic Community 2023

NEXT

NEXT

IVVK JOB OPENING We are hiring Junior Associates

NEXT

NEXT

Startups Attract More Than USD 135 Million to Serbia in 2021

NEXT

NEXT

Construction Plan for a Wind Farm in Bor

NEXT

NEXT

IVVK Lawyers participated in Confindustria HR Forum

NEXT

NEXT

IVVK-UpSkill Workshop "Presentation on social and TV media"

NEXT

NEXT

Serbia and Azerbaijan up for cooperation in the energy field

NEXT

NEXT

Energy permits digitized starting November

NEXT

NEXT

Belgrade declared city with greatest economic potential in region

NEXT

NEXT

Digitalization of fiscalization and invoicing in Serbia

NEXT

NEXT

New Register of Investment Locations in Serbia

NEXT

NEXT

Paysend opens new European tech center in Serbia

NEXT

NEXT

Serbia allows free export of flour from 15 May

NEXT

NEXT

Serbia to announce auctions for renewable energy power plants

NEXT

NEXT

Energy most important for economic development

NEXT

NEXT

Action Plan for Implementation of Digitalisation Programme in Health System

NEXT

NEXT

Oracle Corporation opens regional centre in Serbia