Forex Broker Rockfort Markets Slapped by FMA for Misleading Advertising

The Financial Markets Authority (FMA) has directed licensed derivatives issuer (DI) Rockfort Markets to remove or amend misleading advertising statements on its social media channels and website.

The FMA became aware that certain statements in Rockfort's Facebook advertisements, and on its website, created the impression that trading in derivatives was "safe" or had not presented a balanced view of the risks. In fact, trading in derivatives, and in particular CFDs (contracts for difference) offered by Rockfort as a DI, is inherently risky.

Rockfort also claimed that they exceed the requirements of the Legislation and keep separate client money from their operating money, when keeping client money separate is a requirement of the legislative requirements for DIs. Furthermore, the broker declared it to be a licensed and regulated "forex and share broker", when its licence is as a DI and these services are not licensed in New Zealand.

It is a requirement for advertisements of regulated financial product offers to include a prominent statement that a Product Disclosure Statement (PDS) is available. The FMA identified that certain Rockfort advertisements did not include this statement, and other advertising was inconsistent with the PDS.

The FMA considered that Rockfort's materials were likely to breach the FMC Act, specifically the 'fair dealing' provisions and advertising requirements for regulated offers.

The FMA initially raised its concerns with Rockfort and the company took some steps to amend or remove its advertising materials, but the regulator considered its concerns were only partially addressed.

The FMA issued a direction order to Rockfort under s468 of the FMC Act, whereby the company was directed to remove or amend specified marketing materials.

Following the direction order, Rockfort has certified to the FMA that all its current advertisements have been removed or revised to comply with the order. The company must make another certification in three months that all its marketing materials comply with the direction order.

The FMA is the New Zealand government agency responsible for financial regulation. The watchdog proactively monitors and adds suspicious financial companies to its warning list. Over the past two weeks, the FMA has warned against two firms, namely, www.horizonlinelimited.com and Evorich. Last week, the regulatory body has introduced new regulatory regime for financial advice​​.