Resolution no. 21332

Order, pursuant to article 7-octies, paragraph 1, letter b) of Legislative Decree no. 58/1998 ('Consolidated Law on Finance') to cease the infringement of article 18 of the Consolidated Law on Finance performed through the https://fxtradingcorp.trade website

LA COMMISSIONE NAZIONALE PER LE SOCIETÀ E LA BORSA
[THE NATIONAL COMMISSION FOR COMPANIES AND THE STOCK EXCHANGE]

HAVING REGARD TO Law no. 216 of 7 June 1974 and subsequent amendments and supplements;

HAVING REGARD TO Legislative Decree no. 58 of 24 February 1998 ('Consolidated Law on Finance') and subsequent amendments and supplements;

HAVING ESTABLISHED that, from checks on the https://fxtradingcorp.trade website, it emerged that:

i. the site, linked to "FXTrading Corp" with its alleged registered address in South Korea, offers users the opportunity to entrusta sum of money to FXTrading Corp that the company undertakes to use in the purchase and sale of financial instruments using an algorithmic and automated tradingsystem;

ii. on the homepageof the site in question it states that FXTrading Corp operates "in the Field of FX (Forex Trading)" and that "FX Trading's Groundbreaking Platform uses an Automated Arbitrage System that Yields Profits for Costumers". On the same Homepageit is also said that the "FXTrading Algorithm takes away the guesswork and Executes Transactions Automatically on your behalf";

iii. in the "How does FXTrading Corporation Work?” section of the website, it says "No Financial Advisors [...]. The FXTrading Corp Algorithm [...] Executes Transactions Automatically on your behalf'”;

iv. as for the investment strategies used by the algorithm, the website states: "We take highly sophisticated Investment Strategies that have historically only been accessible to Institutions and a small number of high wealth individuals, and bring it to the Masses";

v. the site also states that a user registered on the site "will benefit by assuming the profit, which is deposited directly into your online account";

vi. as to the traceability of the website in question, on the site it states “FxTrading Corp”, with its alleged registered address in South Korea;

WHEREAS the activity carried out through the https://fxtradingcorp.trade website can be classed as the provision of investment services, as referred to in article 1, paragraph 5, of the Consolidated Law on Finance, insofar as clients are offered the opportunity to entrusta sum of money to the company that the company declares it manages in purchase or sale transactions of financial instruments using an algorithmic and automated tradingsystem, and paying clients the proceeds of said investments directly into the account opened by the clients themselves on the https://fxtradingcorp.trade website. Investment decisions relating to the investor's assets are, therefore, defined and implemented without the need for individual orders from the investor who is asked to delegate the making of investment choices in financial instruments to the company in charge of management;

WHEREAS the aforementioned activity, carried out through the https://fxtradingcorp.trade website, is still ongoing and is aimed at Italian investors, since there have been reports of unsolicited contact through means of distance communication with the public in Italy;

WHEREAS FXTrading Corp, mentioned on this website, is not authorised to provide investment services to the Italian public, insofar as it is not registered on the register maintained by CONSOB pursuant to article 20 of the Consolidated Law on Finance;

HAVING REGARD TO the fact that the provision of investment services and activities is reserved for authorised entities as referred to under art. 18, paragraph 1, of the Consolidated Law on Finance, pursuant to which, 'The professional provision of investment services and activities for the public is reserved for investment firms and banks';

HAVING ESTABLISHED, therefore, that the operations in question qualify as the professional provision of investment services to the Italian public, in infringement of art. 18, paragraph 1, of the Consolidated Law on Finance;

HAVING REGARD TO the fact that, according to the provisions of article 7-octies, letter b) of the Consolidated Law on Finance - 'Powers to counteract abusive practices' - CONSOB 'may, with regard to anyone who offers or carries out investment services or activities over the Internet without being qualified to do so pursuant to this decree: […] b) order that the infringement cease';

CONSIDERING it therefore necessary, in the light of the foregoing, to adopt this resolution immediately for reasons of urgency;

RESOLVES:

To order the cessation of the infringement of article 18 of Legislative Decree no. 58/98 carried out through the https://fxtradingcorp.trade website, consisting in offering investment services and activities to the Italian public.

This Resolution shall be brought to the attention of those whom it concerns and will be published in the Consob Bulletin.

This measure may be appealed before the Regional Administrative Court of Lazio within 60 days of the date of service.

April 22, 2020

THE CHAIRMAN
Paolo Savona