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Monday, November 18, 2019

National Bank of Ukraine warns against forex companies

The National Bank of the Ukraine released NBU Board Resolution No. 327 on August 3, which established a legal framework for the provision of services related to the arbitrage transactions conducted under the terms of margin trading to individuals.

The information was released due to the frequent claims filed by citizens concerning problems arising when arbitrage transactions are carried out under the terms of margin trading through forex companies.

The resolution gives authorized banks the exclusive rights to conduct the arbitrage transactions under the terms of margin trading.

Citizens, however, are encouraged to use the services of reliable and authorized banks instead of unreliable companies and forex clubs. Unlike banks, most forex clubs operate as firms rendering consulting services and such companies are not held financially or legally accountable.

Forex companies may look attractive to citizens as they have a simplified procedure of opening accounts and they lack financial monitoring and tax free income. These companies, however, do come with their own risks. Banks offer more transparency and conduct arbitrage transaction under the terms of margin trading.