Fast Account Registration for Traders
Fast account activation is possible for businesses that operate as either a Sole Trader, Partnership, Trust, or Proprietary Limited Company. Simply provide your business' ABN number and proof of partnership/trust agreement, and the OFXperts team will complete activation within 48 hours.
UIT Sponsors May Maintain a Secondary Market for Trading UIT Units After Form N3 (Registration Form for Separate Accounts That Offer)
Unit investment trusts ("UITs") are investment companies that typically issue a set number of redeemable securities (or "units") to the public. UITs invest in an extensive portfolio of securities.
UITs' investment returns are determined by the performance of their underlying investments, less any fund fees. UITs typically have diversified portfolios with strategies designed to provide investors with income and capital appreciation.
UITs have gained in popularity, yet may not be suitable for all investors. Before investing in a UIT, investors should carefully consider their investment objectives, risk tolerance and time horizon.
If you are thinking of investing in a UIT, be sure to review its prospectus and discuss potential risks with your financial professional. Furthermore, understand the fee structure as well as creation and development fees associated with investing.
Be aware that both the UIT sponsor and your financial advisor may receive compensation for recommending UITs. These payments, commonly referred to as dealer concessions, are used to reimburse your advisor for providing investment advice or client service related services.
In some instances, UIT sponsors offer sales charge discounts to some customers - such as when they roll over money from an earlier series of the same UIT or purchase a new UIT before its maturity date. It is wise to inquire with your financial professional about these types of discounts before investing.
Some UITs also provide a secondary market to trade their units after filing Form N3 (Registration form for separate accounts offering). This secondary market can be advantageous to traders with short investment horizons who need to trade quickly before an offering is released.
However, you should be wary of certain fees that may appear on your account statements. These costs relate to account processing and administration and may differ by product.
Other UIT fees include sales charges, which are partially used to compensate your financial advisor for providing investment advisory services. These charges are detailed in the UIT's prospectus and it's wise to inquire about them prior to investing in any UIT.
The CFTC Advised the Public That Unregistered Brokers Selling Binary Options and Foreign Exchange (Forex) Programs Are Targeting People Who Lost Their Jobs Due to the Coronavirus Outbreak
The Consumer Financial Protection Bureau (CFTC) has received numerous complaints from people who were scammed after losing their jobs due to the Coronavirus outbreak. Swindlers are approaching them with offers of trading in binary options and foreign exchange (Forex) programs that promise high returns.
These traders often request a substantial amount of money to open their accounts. Brokers then promise them expert trading advice that could yield substantial returns on investments. Unfortunately, the CFTC deems this practice to be deceptive and warns against soliciting or accepting funds from non-registered customers.
Binary options trading is a common occurrence in the industry and should be avoided by anyone looking to trade on an American trading platform. The CFTC has issued several customer advisory protection warnings, such as Avoid Unregistered Binary Options Trading Platforms and Beware of Off-Exchange Binary Options Trades, that urge consumers to confirm any entity's registration status before investing funds into them.
Traders should also be aware that many scams in the United States are being perpetrated by individuals without the necessary license to provide financial products or services. They utilize social media and messaging apps to deceive potential investors into believing they can earn a substantial return on their investment without actually being able to do so.
Additionally, some scams use false emails to trick investors into visiting their websites. Once the fraudsters have obtained access to a consumer's personal information, they typically demand large sums of money as payment. In some cases, they even threaten the victim with contracting the coronavirus unless they make the payment.
The CFTC has taken enforcement actions against several entities who have engaged in fraudulent behavior. These sanctions include restitution, disgorgement, civil penalties and permanent trading and registration bans.
In one case, the CFTC filed a complaint against Texas resident and his company Kikit & Mess Investments, LLC. It is alleged that these defendants misappropriated millions of dollars from investors for forex and cryptocurrency trading services. According to the CFTC, this is an illegal Ponzi scheme and they seek restitution and disgorgement as compensation.
Unregistered Brokers Are Using Social Media and Messaging Apps to Convince People They Can Earn Unrealistic Profits From Home
As a trader, make sure you register with the CFTC or another U.S. regulator prior to depositing money or using any services offered by a broker-dealer. These may include trading futures contracts, commodities, foreign exchange (forex) or cryptocurrencies.
It is wise to verify the registration of any individual you interact with online or via messaging apps, including those you meet in person and those who contact you through social media or email. Be wary of scammers who could steal your identity or access your bank account without authorization.
Traders should also avoid engaging with anyone who promises them high returns from their accounts in a short time period. These offers may be fraudulent and the individuals behind them will likely disappear once you stop paying them.
Scammers typically place advertisements on social media and online newsletters that promise unrealistic returns with little effort. They then ask you to sign up for a free or bonus trading account with them, typically using pre-loaded credit cards or pre-paid money transfers, often promising thousands of dollars within just seven days.
Unregistered brokers sometimes provide trading services, such as selling forex programs and binary options. While these traders may advertise that they can help you generate unrealistic profits from home, they usually tack on exorbitant "fees" and "taxes" to make these claims appear legitimate.
Unregistered brokers also sell crypto tokens through initial coin offerings (ICOs) to investors. Although these tokens lack legal protections or risks, the SEC has reported that some unregistered brokers are using these coins for brokerage activity within the United States.
The SEC has issued cease-and-desist orders against TokenLot LLC and its operators for acting as unregistered broker-dealers in the United States by facilitating the sale of tokens from nine ICOs for transaction-based compensation. At present, these defendants await enforcement action from the SEC as well as a court judgment for securities violations.
The CFTC’s Fee Fraud Warning
Traders can easily be deceived by scammers' promises of security. Scammers use traders' emotions and prejudices to entice them into signing up for new accounts or opening investments that seem too good to be true. The CFTC warns traders to be wary of such offers and ensure the brokers they work with are registered with the CFTC.
The Commodity Futures Trading Commission (CFTC) regulates the derivatives market and has been charged with ensuring it's free from fraud and manipulation. Its enforcement authority over futures, swaps and spot commodity markets is based on the CEA, which prohibits any manipulative device or scheme. Congress granted CFTC anti-fraud and anti-manipulation authority over all futures/swap contracts as well as all transactions which involve actual purchases of commodities - sometimes referred to as "spot" or "physical" transactions".
The CFTC also has control over digital assets, such as cryptocurrencies. It has issued orders requiring market participants to cease trading in certain cryptocurrencies if they break the law, and also penalized several individuals for spoofing, which refers to placing bids or offers that do not correspond with a commodity being traded.
Under CFTC rules, three elements must be proven in order to establish fraud liability: (i) making a misrepresentation, misleading statement or deceptive omission; (ii) intent to mislead or defraud; and (iii) materiality.
One of the most frequent forms of fraud involves get-rich-quick schemes. Often, foreign currency trading firms lure individuals into investing in the spot foreign currency (Forex) market through false promises and high pressure sales tactics.
Fraudsters may claim they possess special insider knowledge or insights, or that you can earn unusually large returns. They may also promise guaranteed profits, certain trading signals, or low costs when opening accounts.
These promises are often timed to reach consumers at their most vulnerable moments, such as when they are losing money in the stock market or after COVID-19 has affected commodity prices. They may use social media and messaging apps to spread their scams.