National Bank of Ukraine advises not to trust money with Forex companies

The National Bank of Ukraine draws attention of citizens that exclusively authorized banks may perform arbitrage transactions on the terms of marginal trade, and advises not to trust money with Forex companies.

This is said in the NBU press release, published on the official website of the regulator due to numerous approaches of citizens on the problems, which emerge during holding arbitrage transactions on the basis of marginal trade through so-called Forex companies.

“An issue of rendering services to natural persons in the sphere of arbitrage operations on the terms of marginal trade was regulated by Resolution No. 327 of August 3, 2012. This Resolution fixed a right to perform arbitrage transactions on the terms of marginal trade exclusively with authorized banks,” a statement reads.

At the same time, as the NBU notes, Ukrainian citizens unfortunately use services and trust own funds with unreliable companies and Forex clubs, without thinking over legitimacy of those organizations' work.

“As distinct from banks, the majority of Forex companies are working as firms, rendering information services. And agreements with clients are concluded by the foreign company, which is, as a rule, registered in the off-shore zone. Such a company is not at all responsible either legally or financially and respectively is not able to give any guarantees on fulfillment of its obligations,” the National Bank explains.

Peculiarities of off-shore activities of such companies allow them pursuing the unfair policy, which leads to emergence of additional risks for clients. The clients' bids are often fulfilled at non-market rates or are not fulfilled at all. The clients often incur losses due to non-return of received incomes. In addition, the off-shore status of such companies allows them terminating their activities without special problems. In such a case, it will be impossible for a client to return own funds. Since the funds were transferred abroad not as a guarantee payment with the aim of making arbitrage transactions, but as a payment for services, which allegedly were rendered by the company.

“A simplified system of opening accounts, absence of financial monitoring and tax obligations makes those Forex companies attractive for our citizens. These doubtful advantages cannot be compared with the risk faced by those companies,” the NBU is convinced.

Services on holding arbitrage transactions on the terms of marginal trade with higher quality and reliability can be received in banks, the NBU notes.

In case of marginal trade operations on international markets through bank institutions, clients may control and check the movement of their funds through own bank accounts. And this saves people from risks of the loss of funds as a result of unfair actions of financial mediators,” the statement emphasizes.

Adapted from ukrinform