OREANDA-NEWS. In response to frequent claims filed by citizens concerning the problems arising when the arbitrage transactions are carried out under the terms of margin trading through so called forex companies, the National Bank of Ukraine draws public attention to the following information.

NBU Board Resolution No. 327 of 3 August 2012 established the legal framework for the provision of services related to the arbitrage transactions conducted under the terms of margin trading to individuals. By virtue of this Resolution, the authorized banks have been granted the exclusive right to conduct the arbitrage transactions under the terms of margin trading.

However, unfortunately, Ukrainian citizens keep using the services offered by unreliable companies and forex clubs and trust their money to these companies, without questioning the legitimacy of these companies' business activities.

Unlike banks, most forex clubs operate as firms rendering consulting services. It is common practice that customers conclude agreements with a company registered overseas, in the offshore area. Such a company is not held financially or legally accountable, and therefore there is no guarantee that it will fulfill its obligations to customers.

The status of offshore companies allows them to engage in unfair business practices, thus exposing their customers to additional risks. The bids submitted by customers are either accepted at “non-market” exchange rates, or not executed at all. Customers incur losses due to their inability to repatriate their earnings. Furthermore, the status of offshore companies allows these companies to terminate their activities without any problems. This being the case, a customer is unlikely to get his own funds back because the funds have been transferred abroad as fees charged by these companies for services rendered rather than a margin in order to conduct arbitrage transactions.

The simplified procedure of opening accounts, the lack of financial monitoring and tax free income make forex companies attractive to our citizens. However, these companies expose their customers to risks that outweigh these doubtful benefits.

Banks offer high quality and reliable services related to the conduct of arbitrage transactions under the terms of margin trading. Banks have the necessary equipment and employ qualified experts to handle arbitrage transactions under the terms of margin trading. In addition to this, banks are the most transparent institutions operating on the financial market, with rigorous banking supervision and control being in place.

When margin trading operations are carried out through banking institutions, customers can control and trace cash flow through their bank accounts. As a result, people can avoid the risk of losing their money due to fraudulent actions of financial intermediaries.