The French market regulator Wednesday called for ‘great caution’ on foreign-exchange trading via Contracts For Difference, or CFDs, and forex forwards.
‘The Autorite des Marches Financiers has noted a fresh upsurge in recent weeks of aggressive advertising campaigns on the internet for trading foreign exchange, in particular via CFD products or forex forwards,’ the AMF said in a statement.
Clients must ensure the intermediary advising such investment products is on the list of financial establishments authorized to operate in France, the Autorite des Marches Financiers said.
The regulator also said traders and investors should be wary because the leveraged aspect of contracts for difference strategies significantly increases the risks associated with investing.
‘These products are designed for experienced investors able to monitor their positions on a daily basis, or even several times a day, and who have the financial means to carry such a risk,’ the AMF said.