In light of inaccurate publications concerning supervision of trading platforms, the Securities Authority clarifies to the public that the supervision of these platforms has not yet begun, and the risks involved.
There are many trading platforms in Israel that allow customers to trade in complex financial instruments through Internet trading systems. The most prominent financial instruments traded on these platforms are: contracts for differences (CFD), binary options, and rolling spot forexes. These instruments are offered on various underlying assets but mainly on currencies (thus also the name of these companies – “Forex” companies).
The Knesset Finance Committee recently approved the Securities Regulations (Trading Platforms to Their Own Account), 5774–2014, which is intended to apply ISA’s supervision on the activities of trading platforms. The Regulations are expected to be published in RESHUMOT soon, but the commencement date is six months after publication in RESHUMOT. The supervision will not start immediately on the date the Regulations take effect, but rather for every platform that has applied for a license – the supervision will commence following the approval of its license.
Israel Securities Authority would like to clarify that contrary to inaccurate publications on this matter, the actual supervision of activities for which a trading platform license is required has not yet begun and none of the platforms currently has a license from the ISA.
In view of the aforesaid, the public must pay heed to the many risks involved in activities on trading platforms until supervision begins. These include, among other things, the complexity of the activities, high leverage, lack of transparency, stability of the platform, and the fact that the platform is frequently the opposite party to the transaction being performed by the customer. Even after supervision has begun, activities on the platforms will be prone to risks, but in the absence of supervision, these risks are especially great.
The ISA refers in this context to a recently published warning about unregulated investments in the following link:
