National Internet Finance Association of China
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Risk Alert on Illegal Financial Trading on Online Platforms

  

Recently, through monitoring by financial regulatory bodies and NIFA, significant financial and social risks have been identified in the increasing illegal leveraged trading activities in multiple financial products on various kinds of online platforms. To help the public understand investment risks and protect their legitimate rights and interests, we hereby caution the public on the following matters:

I. All kinds of trading activities in financial instruments such as foreign exchange, precious metals, futures, and indexes, including cross-border trading in such instruments, practiced by domestic institutions on all types of online platforms including websites, mobile communication terminals and applications without the approval of China’s financial regulators , as well as trading services which are provided by foreign institutions to domestic investors on the aforementioned types of platforms without the approval of China’s financial regulators and deal in financial instruments such as foreign exchange, precious metals, futures, and indexes, constitute violation of the law. All existing online platforms which engage in leveraged trading in the likes of foreign exchange and precious metals, including cross-border trading of such instruments, were founded without legal basis and have never been approved by any financial regulator. As online platforms engaging in the above businesses are illegal, the rights of both parties in such trading activities are not protected by the law. Hence there are relatively great risks investing on such platforms.

All kinds of financial institutions and payment institutions engaging in Internet Finance businesses should abide by national financial laws and regulations and may not provide services for such illegal financial trading. NIFA hereby urges the public to understand the nature of such illegal financial trading, resist the lure of high returns, enhance awareness of self-protection, refrain from trading activities in violation of law and regulations, and avoid financial losses due to illegal trading. Any clues of illegal activities, once discovered, should be reported to governing authorities or the police immediately.

II. NIFA’s member institutions should strengthen self-regulation, resist illegal financial trading, and refrain from providing any services for such activities.

National Internet Finance Association of China

November 10th, 2017

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