The Financial Conduct Authority has issued a warning to the FinTech FreeTrade in the UK, stating that it believes there are misleading advertisements to attract non professional investors.

FCA stated in its notice that: These promotional activities have left consumers with the impression that they can reduce debt by following investment activities recommended by social media influencers and using them as a mechanism to make money. However, this is clearly misleading, as no one can guarantee that the investment will bring positive returns in the short or long term. Consumers who are already heavily in debt are particularly susceptible to this impact

The FCA in the UK has requested FreeTrade to remove all paid social media influencer posts, citing concerns that it may attract indebted consumers hoping to profit from the low-cost investment boom. The City of London regulatory authorities have stated that FreeTrade should cancel all social media promotional activities to prevent young people from being tempted by venture capital.

This command applies to all advertisements appearing on social media platforms, including but not limited to Facebook, YouTube, Instagram, LinkedIn, and Twitter. The regulatory notice also mentioned the video sharing application TikTok, which is one of the most commonly used social media channels for influential individuals to promote high-risk transactions.

This stock brokerage startup was valued at £ 650 million in recent crowdfunding and claims to have 1 million clients trading on its platform. FreeTrade does not collaborate with established brokers, but holds a "full scope company" license issued by the FCA.

FCA has been strengthening its scrutiny of retail brokerage advertising

The FCA has released a series of warning advertisements that pop up every time UK internet users search on Google using keywords such as "high return investment" or "most suitable stocks for trading". The UK's highest financial regulatory body also prohibits measures such as traders inducing investments, such as recommending friends to receive bonuses or new members to receive gifts.

The FCA has been increasing its attention to retail investments and brokers as financial scams become increasingly complex in hiding their true company details and contact information. Regulatory authorities believe that it is not only necessary to protect consumers from fraud, but also to protect consumers from small financial losses of regulated companies that may provide products that cause similar harm.

Recently, regulatory authorities have also emphasized their concerns about financial promotional activities, which mistakenly imply that all company activities are regulated by the FCA or other regulatory agencies, when in reality they are not.

Retail foreign exchange/spread contract brokers have also received attention as two regulated brokers have gone bankrupt within a month. SVS Securities Company (SVS) was established in 2002 and is a regulated financial services broker holding significant amounts of client funds and assets. The second case involves AFX Markets Ltd (AFX), which was established in 2011 and has been authorized by FCA since May 2012.

Source: FX110