Central Bank sets strict requirements for provision of investment services related to leveraged transactions in FOREX market

The Central Bank of Armenia (CBA) issued a statement according to which it sets strict requirements for provision of investment services related to leveraged transactions in FOREX market.

The statement reads: “In recent years the offers for providing access services to the FOREX market by different persons have been intensified in Armenia. The leveraged transactions in the FOREX market are considered as highly risky deals and contain real dangers of loss of the investors’ resources. The leveraged transactions enable the investors to carry out transactions with the volume exceeding the amount invested by him for multiple (several hundred) times. Usually, the offers for making such investments or trade mislead the investor, promising easy incomes, but this has nothing to do with the reality. Moreover, the investor’s loss can be more than the invested money. This market is also not free of abuse cases: the investor sometimes has no chance practically to find out where his monetary investments are kept and there are many cases when the investor is unable to receive his money back.

Given the aforementioned risks, the Central Bank has set strict requirements for the provision of investment services in connection with the leveraged transactions in the FOREX market. In particular, such services can be provided only to professional customers, in other words, to those who have respective experience and knowledge to understand all risks from such deals and make their own investment decisions. The provision of investment services in connection with the leveraged transactions in the FOREX market is banned for non-professional customers.

At the same time, necessary risk restraining mechanisms for the protection of interests of professional customers have been installed”.