CFDs, rolling spot forex, binary options

CONSOB has published a communication for investor protection on the risks associated with new highly-speculative, risky and complex forms of financial investment such as contracts for difference (CFDs), rolling spot forex and binary options which, over the last few years, have spread more widely in the various European Union countries, including Italy.
The communication describes the CFDs, rolling spot forex and binary options between Italian clients and EU investment firms without a branch in Italy cannot be taken to the new Arbitrator for Financial Disputes (AFD), set up recently at CONSOB.
In Italy, it must be added, the sector is characterised by the presence of numerous abusive subjects that do not have authorisation to operate, that offer contracts over the Internet without however being subject to administrative supervision by the Supervisory Authorities.
In brief, in its warning CONSOB tells investors to take care, stressing that:
- investment in CFDs, rolling spot forex and binary options, is not suitable for most investors;
- this form of investment can entail losses even much greater than the capital initially invested;
- it is necessary to proceed to begin operations only after effectively understanding and assessing all the risks connected with the investment in question;
- it is necessary to ascertain always that the offering subject is authorised to operate in Italy, consulting the specific lists maintained by CONSOB (as regards investment firms) and by the Bank of Italy (as regards banks), which can be found on the respective institutional websites. To this end it is opportune to consult also the section “Warnings for investors” present on the CONSOB institutional website, containing the reports, coming from foreign supervisory authorities, as well as from CONSOB itself, of financial activities carried out abusively and of the subjects responsible for them.