The Financial Markets Authority of New Zealand, FMA, has been very active this year. Over the past several months, the regulatory agency has flagged more than 60 companies, while, in 2019, the company flagged a total of 40 scams. One of the major reasons why the regulatory body has been so active this year is that the number of scam companies has increased a lot in the country recently.
As New Zealand’s regulatory body said, one in every five citizens of the country was a target of financial scams during the Covid-19 pandemic. The companies that were trying to lie to people and get their funds illegally were mostly the ones that impersonated legit Forex brokers in the country. This is a very dangerous situation for local traders because they think that they are trading with legit Forex brokers, while, in reality, they are trusting very dangerous companies.
In total, the Forex trading regulator issued as many as 61 warnings this year, only between April 1 and November 5. The number is much higher than it was the previous year. 21 of the companies that the regulator flagged are imposter scams, which means that they have faked the websites and social media accounts of their business and made it look like legit Forex brokers.
For many times now, the Forex trading regulator has warned people about other companies that were trying to look themselves as other legit Forex brokers in the market. The regulator has noted that they are always staying very focused on identifying scams very fast. The regulatory body has also said that traders should be more focused on choosing a broker to trade with. As they have said, in this situation, scammers are using every source to lie to people and get their funds illegally.
There are many legit Forex brokers in New Zealand and this is used by scammers for their benefit. This situation is very dangerous for traders in the country, especially for those who are new to trading. It is very important for traders of Forex to make sure that they are only trusting safe and secure Forex brokers because the market is already very risky on its own and additional risks are not something that you would want to open yourself up to.
Forex trading in New Zealand
Forex trading in New Zealand is very popular. Before any Forex broker is able to accept traders from the country, they have to become authorized by the main regulatory body of the country, called the Financial Markets Authority, better known as the FMA. FMA is the main financial regulatory body of the country, taking care of the whole financial market, including Forex trading.
There are many well-known and reputable Forex brokers that are offering the citizens of the country Forex trading services. Because the market is so popular here, the regulatory body has to work double as much. The regulatory body of the country is no stranger to blacklisting shady Forex brokers. FMA has always been very active in ensuring that the market stays safe and secure for all participants.
Covid-19 and more scammers
Forex brokers in New Zealand are working very hard to participate in making the market safer for traders. The main regulatory body of the country, the Financial Markets Authority is known to be very active in fighting against scams in the market. However, this year, everything has become a lot harder.
Because of the Covid-19, most of the people were stuck in their homes. This opportunity was used by scammers for their own advantage and they were more active than ever before. As a result, many people ended up losing their hard-earned money. The situation is very hard around the world, because of which, regulatory agencies have become very active in search of finding and identifying Forex scams in the market.
As a result, many scammers have been banned across the world. Forex regulars around the world are also working very hard to adopt new regulatory frameworks and guidelines to take the situation under control.
The same problem is prominent for other countries as well, and the FMA is not the only one facing the challenges. Recently, the main regulatory body of Cyprus, known as CySEC, has announced that it has blacklisted a number of Forex trading companies. Much like in the situation of New Zealand, the majority of the companies that CySEC has blacklisted were the ones that were claiming to be legit FX brokers.
The major scheme that these spam companies are following is very similar. The worst thing, however, is that most of these scammers are creating new websites once they are being flagged. This is why traders should always keep an eye on details. Many of these Forex brokers were actually claiming to be licensed by regulatory bodies. So, before you start trading Forex, make sure to double-check the information about the regulatory status of a certain company, because, in many cases, they are not really authorized to offer trading services.