INVESTORS should be banned from trading contracts for difference unless they prove they can handle the highly complex derivatives, the Financial Ombudsman Service (FOS) has said. The call for a ban in  the FOS’s annual review goes beyond the independent complaints body’s earlier written submission to the corporate regulator asking for comprehensive education to protect investors.

”In our experience, the only investors who trade in CFDs successfully are sophisticated traders who watch and manage their investments full-time,” the FOS stated in its review.  In the review, the FOS raised the need for CFD traders to obtain a certificate from an accountant or financial planner to show they are competent to trade CFDs. The FOS’s  investments ombudsman, Alison Maynard, said in an interview: ”We think a certificate from an accountant or an AFSL holder [financial planner] would be an appropriate safeguard.”

The FOS’s annual review for last year said of 54 complaints it had received in derivatives and hedging, half related to CFDs. ASIC’s approach, foreshadowed in a November consultation paper, focuses on CFD providers meeting a regime of disclosure against a set of benchmarks.

http://www.smh.com.au/business/call-for-cfd-trading-certificate-20110307-1bl5a.html

Filed under: CFD News by LearnCFDs.com
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The chief executive of collapsed brokerage Sonray Capital Markets, Scott Murray, was arrested in Melbourne, a source said, and was expected to appear in the Professional Melbourne Magistrates’ Court this afternoon on 10 charges. The company’s collapse in June of last year was investigated by the Australian Securities and Investment Commission and the charges laid by the Commonwealth Director of Public Prosecutions. Mr Murray was one of two founders of Sonray, which is understood to owe more than $47 million to some 4596 clients including BT Australia founder Chris Corrigan, who is seeking $6.9m in a legal action he recently launched. Sonray offered its clients a sophisticated software platform through which they  could trade equities, contracts for difference (CFDs), exchange rates, futures and options. The company’s auditor, HLB Mann Judd, is one of several parties that may be brought in to mediation to help recover the lost clients’ funds, according to a recent letter sent to creditors by liquidator Ferrier Hodgson.

http://www.theaustralian.com.au/business/city-beat/sonray-capital-markets-chief-scott-murray-arrested-source/story-fn4xq4zx-1226010122305

Filed under: CFD News by LearnCFDs.com
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