Belgium’s Financial Services and Markets Authority (FSMA) warns the public against various companies that are selling training in trading in complex financial instruments such as Forex derivatives.

Typically, those who sign up for such training are given access to instructional videos, webinars and live chat sessions with all sorts of information about how the Forex market works. They explain what forex derivatives are, how exactly you can trade in them, what type of orders you can place and what software you can download for the purpose. The message is that Forex trading offers opportunities on condition that you have thoroughly studied and have a full understanding of how it works.

This comes with risks, the regulator warns, First, the FSMA reminds that distribution of derivative instruments traded on an electronic trading system and involve leverage (including certain forex instruments) is prohibited in Belgium.

Secondly, such training materials are often distributed done via a pyramid structure. In general, these are referred to as ‘MLM’ (multi-level marketing) schemes, in which consumers are incentivized to bring in new members. In exchange, they receive compensation in the form of a commission or discount on the price of the training.

Such MLM networks appear to be active on social media via countless (private) groups. It appears that these schemes mainly target young people. The message is that everyone can afford a luxurious lifestyle provided they bring in enough new members and make the appropriate investment in the training on offer.

Offers of instruments on forex via internet are very risky and open to fraud: anyone who invests in instruments on forex runs the risk of losing the entire sum invested, FSMA warns.

The Belgian regulator is aware of the following websites that offer this type of training to Belgian consumers.

• Edu4traders (www.edu4traders.com)
• SmartCapitale.fr (www.smartcapitale.fr)
• Tradehouse Europe (www.tradehouseeurope.com)