As published on financemagnates.com, Friday 21 April, 2023.
Hong Kong's Securities and Futures Commission (SFC) has issued a warning against Vantage International Group Limited, the Cayman Islands registered arm of popular forex and contracts for differences (CFDs) broker Vantage.
The regulator labeled the website of Vantage as 'suspicious'. Additionally, the warning highlighted that "the company appears to target Hong Kong investors."
The SFC noted that "suspicious website operators often use names similar to legitimate companies to confuse investors." However, the website mentioned in the warning is the legitimate website of Vantage, which points towards a false alarm on the regulator's part.
On top of that, the SFC's warning listed the address of all Vantage entities listed on Vantage's website. However, the mentioned Vantage International Group Limited is only a Cayman Islands-registered entity, and the other entities of the brokerage group were not named.
"We are currently reviewing the situation and will take any necessary steps to protect our clients while ensuring our compliance with relevant regulations and laws," a spokesperson from Vantage told Finance Magnates.
Headquartered in Australia, Vantage is a big name in when it comes to retail trading. The broker operates with regulatory licenses in Australia, the United Kingdom, Vanuatu, and the Cayman Islands.
When it comes to offering CFDs in Hong Kong, the regulations are a bit tricky. The SFC strictly prohibits local brokers from providing CFDs instruments, but there is no current ban on using foreign brokers' services. This allows foreign brokers to offer their products and instruments to local traders.
The high cost of living and the wealth of locals make Hong Kong a desired place for retail brokers to offer their services. According to the data made available to Finance Magnates by cPattern, the average value of monthly deposits by Hong Kong residents between 2021 and 2022 (data available for the period from October 2021 to February 2022) amounted to over $13,000. Only traders in the UAE with an average deposit of $12,685 are close to Hong Kong.