MANILA, Philippines — The Securities and Exchange Commission (SEC) urged the pubic to stop engaging in foreign exchange trading and other similar activities, saying that these are illegal in the Philippines.
“The public is hereby advised to stop engaging in foreign exchange trading and to stop investing in foreign-registered investment platforms of commodity futures, contracts for difference (CFDs), indices, binary options and the like,” the SEC said.
Binary options, CFDs and the like are financial products that give an investor exposure to price movements in securities without actually owning the underlying assets such as a currency, commodity or stock.
In an advisory, the commission said it has been receiving reports for months now on unscrupulous individuals enticing investments from the public for foreign exchange trading.
“The SEC advises the public that persons and entities acting as brokers, salesmen or agents of these securities have no license to engage or deal in any manner with these securities and should, therefore, be avoided or ignored,” the SEC said.
The SEC noted that there has been a proliferation of free training seminars on such activities particularly trading in foreign exchange, commodity futures contracts, CDFs and similar derivatives.
These seminars are supposedly conducted by local and foreign experts and are promoted on radio, television, newspapers and in the internet.
Some of the seminars, unfortunately, serve as a front for illegal offering and selling of unregistered securities by unlicensed brokers, the SEC said.
“Participants and prospective investors are enticed to attend the free seminars with the prospect of learning successful strategies in investing and profiting from the above-stated securities using various electronic investment platforms. These electronic platforms are allegedly foreign-registered and are accessible anywhere in the Philippines through the internet,” the SEC added.
activities are illegal.
“It must be clear that the SEC does not allow the registration of foreign exchange, commodity futures contract, CDFs and other similar derivatives nor their brokers as the pertinent rules governing these securities remain suspended pursuant to Rule 11 of 2015 Implementing Rules and Regulations of the Securities Regulation Code,” the SEC said in its advisory.
These activities are highly volatile and high-risk, the commission said.
Faced with highly-volatile figures, some investors have reportedly incurred losses that are greater than their initial investments.