On December 28, 2015, the Turkish Capital Markets Board (CMB) announced it was blocking access to MXTrade's website. The CMB is the regulatory entity that governs forex trading in Turkey. In essence, MXTrade was soliciting clients in Turkey without the authorization to do so.
The CMB cited the following relevant articles from the new 2013 Capital Markets Law No. 6362:
- Article 39 specifies that the performance of investment services and activities is a regulated activity that requires permission from the CMB.
- Article 37 specifies the types of investment activities that this law relates to. They include:
- receiving and transmitting orders
- executing orders on behalf of a client
- operating trading systems and regulated markets that are not exchanges
- investment advice
- any other activities that the CMB decides
- Article 99(3) specifies that if unauthorized market activities have taken place via the internet, the CMB may arrange for access to the offending internet site to be blocked. For websites hosted within Turkey, this may be done via the courts. For websites hosted outside the country, this may be done via a request from the Information and Communications Technologies Authority.
- Article 115(5) references article 109. Article 109 specifies the penalties for performing unauthorized activities covered by this law. Penalties include:
- Jail time of two to five years
- Large fines
The CMB took action against MXTrade after conducting investigations in February 2015.
So Is MXTrade A Scam Broker?
This action against MXTrade does not directly show that MXTrade was trying to scam its customers. However, it does indicate that MXTrade either:
- has little regard for the law in certain countries
- is not competent enough to understand its regulatory requirements
If either of the above are true, it represents a risk to the potential client. Do you want to deal with a broker who either doesn't care or doesn't understand the regulations that are there to protect you? There are many other brokers out there with an excellent regulatory record.
MXTrade is a forex broker brand owned by Lau Global Services Corporation. The company is headquartered in Belize City, Belize, which is in Central America. The broker offers brokerage services for spot forex, metals and CFDs. They operate in over 140 countries worldwide. They are regulated by the International Financial Services Commission of Belize. They appear to not be regulated by any other entity, including any of the 140 countries in which they offer services.
Author: Forex Scam Alerts Google+