Avoid scams, save money |19 March 2022
In the continued efforts of the Financial Services Authority (FSA) to educate members of the public about the Capital Markets, there is a need to increase investors’ and customers' ability to identify fraudulent investment opportunities and/or scams – as we may all know it. This unfortunately, has risen as more people are opting to invest in non-bank investment alternatives such as securities.
Scams can come in many forms which include but not limited to:
- Unlicensed companies using names similar to those of licensed and regulated companies;
- Unlicensed companies falsely claiming to be associated with licensed companies; or
- Scammers sometimes impersonating licensed entities to seem legitimate either through websites that are not linked to any entities licensed or regulated by the FSA or any other regulatory body in any capacity.
The Capital Markets are financial markets that bring buyers and sellers together and therefore primarily exist because of investors. Therefore, investor protection is a critical component of the sector, and principally the FSA, as one of the regulators. The role of the FSA is to therefore supervise, monitor and regulate licensees in accordance with the Financial Services Act, 2013; in order to ensure proper development of Seychelles’ financial services industry as well as safeguarding investors’ and the public interest. Nonetheless, it is also on the onus of the customer to strongly consider the following before investing:
- Know the products – There are different types of investment products, each carrying a certain degree of risk. Therefore, understanding the risks involved in relation to the company’s products and/or investment services offered is imperative.
- Gain knowledge about trading – When investing in securities, you are responsible for your decisions. It should be noted that companies do not accept any liability or responsibility for your own investment decisions which may be related to any losses which you may have incurred.
- Do your research – Check if the company is regulated by the FSA on the following website - https://fsaseychelles.sc/regulated-entities/capital-markets or regulated by another regulatory body. Therefore, do not assume a company is legitimately regulated by the FSA if it does not appear on this list.
- Visit the FSA’s website for any Regulatory Updates – Scam Alerts first for any updates.
- Before opening an account with the Company, be sure to always read the investor’s prospectus and all the legal documents pertaining to the Company’s trading account and platform in general. This will help you to better understand the implications of trading.
- Always read and understand the Company’s Terms and Conditions, Execution Policy and Risk Disclosure Policy, among others. It is for your own benefit and protection. Should you not understand, we recommend that you seek legal advice before you start trading.
The financial services industry is constantly evolving with the emergence of new technologies, products and services; hence, making almost anyone vulnerable to scams or fraudulent activities. It is therefore, important that members of the public stay abreast of all relevant ongoing changes within the sector as well as, the protection measures available in order to better protect their interest and keep in line with their financial objectives.
Contributed