Issue link: https://maltatoday.uberflip.com/i/1158932
22.08.19 15 FINTECH THE Malta Financial Service Authority ("MFSA") has become aware of an entity by the name of Lor Service Libre which is promoting the provision of loan services via social media; servic- es which are licensable and fall under the Banking Act, Chapter 371 of the Laws of Malta. e Authority would like to inform the public that Lor Ser- vice Libre is NOT registered NOR authorised by the MFSA to provide loan services, any form of credit services or any other financial services in Mal- ta. e MFSA therefore alerts the public, in Malta and abroad, to refrain from undertaking any business or transactions with the above-mentioned entity. e MFSA would like to re- mind consumers of financial services not to enter into any fi- nancial services transaction un- less they have ascertained that the entity with whom the trans- action is being made is author- ised to provide such services by the MFSA or another reputable financial services regulator. A list of MFSA licensed entities is available and can be viewed on the official website of the MFSA at http://www.mfsa.mt/pages/ licenceholders.aspx. Anyone who fears they are a victim of a scam or think they might be dealing with an un- authorised entity or any other type of financial scam, should stop all transactions with the entity and contact the MFSA at https://www.mfsa.mt/about-us/ contact/ MFSA issues warning on Lor Service Libre AS part of its ongoing efforts to enhance consumer protection, the MFSA has updated the Conduct of Business Rule- book to implement important changes essentially restricting the marketing, distribution or sale of Contracts for Dif- ferences (CFDs) to retail investors. is update follows an extensive consulta- tion process which the Authority held with industry earlier this year. During the last years, the European market has witnessed a rapid increase in the marketing, distribution or sale of CFDs to retail clients across the EU. CFDs are inherently risky and complex products. European regulators have expressed widespread concerns on the increasing number of retail clients trad- ing in these products and having them losing their money. ese concerns are also supported by the numerous complaints received from retail clients across the EU who have suffered significant losses when trading CFDs. e permanent restrictions, intro- duced in the Conduct of Business Rule- book, include amongst other things, requirements that ensure that investors do not lose more money than they put in. Moreover, there also restrictions on incentives offered to trade in CFDs and investors must be provided with under- standable risk warnings so that they are aware of the high degree of risk involved when investing in such products. Moreover, the MFSA has introduced standardised warnings on the risk car- ried by such investments to ensure that customers are made aware of the high degree of risk involved when investing in such products. MFSA's Head of Conduct Supervision Dr Michelle Mizzi Buontempo, said that "these rules, in line with the MF- SA's Vision, seek to strike a balance be- tween the market's need to provide fair competition and client choice, while at the same time protecting consumers of financial services, and safeguarding the integrity and stability of the financial system." e European Securities and Markets Authority ('ESMA') has issued a formal opinion on the MFSA's national product intervention measures relating to con- tracts for differences. • MFSA updates Conduct of Business Rulebook to include the relevant provisions regarding the permanent restriction on the marketing, distribution or sale of CFDs to retail investors in or from Malta • CFDs are complex and risky financial products with significant risk of loss of money • Investment firms will be required to warn retail clients of risks involved when investing in these products MFSA enhances consumer protection by restricting the sale of Contracts for Differences (CFDs) for retail clients A CFD is a derivative instrument other than an option, future, swap or forward rate agreement, the purpose of which is to give the holder a long or short exposure to fluctuations in the price, level or value of an underlying, irrespective of whether it is traded on a trading venue. CFDs must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event. Rolling spot forex contracts are also in scope. What are CFDs?