From Sakvithi to Golden Key to the 20,000 unregulated financial institutions against the 31 financial companies regulated by the Central Bank, Sri Lanka has a large 'grey' if not black market. An unregulated forex brokerage has become the latest entrant to this 'grey' market.
Ceylon Today learns the forex trading brokerage company has started operations in the heart of the country's financial capital – Colombo, without obtaining the necessary approval from the Controller of Exchange.
A company by the name and style of FE Trading Company is aggressively marketing products ranging from US$ 500 to US$ 10,000 with 1:200 leverage trading options and secretly marketing forex trading products to Sri Lankans, while maintaining they are mainly handling Indian clients.
According to authorities, Sri Lanka's Exchange Control Act does not at present permit any operation of forex trading brokerage serving Sri Lankans or an office of forex trading brokerage that serves foreigners, unless such an entity is given special approval by the Department of Exchange Control. Similarly Sri Lanka's official forex association lists the licensed commercial banks, brokers and the primary dealers, who are allowed to handle forex operations. (http://www.srilankaforex.com/sri-lanka-banks.html)
The FE Trading Company had been operating from as early as March this year from the 19th Floor of the East Tower of the World Trade Centre in Colombo, next door to the commercial space of a reputed licensed stock brokering house dealing in the Colombo Stock Exchange (CSE).
However, according to available internet information, the company had recently launched its website titled www.fetradingco.com and mentions a contact number 011 5897100, while the customers are being directed to visit www.ufxmarkets.com. According to sources, currently a foreigner by the name of 'Iain' represents the company in the capacity of a Director, along with a Manager by the name of 'Isham', who first contacts Sri Lankan customers who wish to trade in the forex market. The company also says they represent the Asian Regional Head Office of 'UFX Markets' operating from Sri Lanka and handle clients from India, Singapore and Malaysia.
According to the 'who is database' of web registries, the FE Trading Company's website had been registered only on 13 March 2013 and will expire on the same date in 2015. The domain name www.fetradingco.com had been registered under a company called SVS Marketing India Ltd., housed in the United Kingdom at Barn 6, Dunge Farm, Macclesfield Road, Over Alderley, SK10 4SN, registered to a person by the name of De Havilland. Iain, having the email address firstname.lastname@example.org and contact number 07780479195, is listed as the Administrative and Technical contact of the company.
However, the so-called mother entity of FE Trading Company – UFX Markets does not list any directors in its official website, but states they have worldwide branches in the United Kingdom, (Phone:+44.203.608.1558/Fax: +44.203.608.1559), France (Phone:+33.97.518.0057), Germany (Phone: +49.303.080.8240), Italy (Phone: +39.029.475.0321), Russia (Phone: +7.499.638.5977), Turkey (Phone: +90.212.414.1731), Romania (Phone: +40.31.814.2263), UAE (Phone: +800.035.702.407), Bahrain (Phone: +973.1619.9863), Japan (Phone: +81.34.578.0016), Hong Kong (Phone: +852.5808.2484), India (Phone: +91 44 405 12345) and Singapore (Phone: +65.3158.1715).
The company does not list Sri Lanka and none of the addresses of the head office in United Kingdom or other branches are listed in the official profile. Moreover, the UFX markets website had been registered privately on 3 November 2008 and expires on 3 November 2017, whilst the servers had been updated last on 11 July 2011.
When Ceylon Today inquired from the company as to whether they had obtained licence/registration from the Central Bank of Sri Lanka (CBSL), company officials stated they might go for a licence in the future, but admitted they have not yet been registered, adding they were operating a 'regional office'.
Controller of Exchange at the CBSL, P.H.O. Chandrawansa, on the other hand, told Ceylon Today, neither offshore forex brokerage serving foreign retailers nor offshore forex brokerage serving Sri Lankans is permitted unless they have obtained a special licence or approval from his department. He added the Department had not given special approval to any company in recent times and no company by the name 'FE Trading Company' was seeking approval from his Department.
"This is the second time Sri Lanka's World Trade Centre building – the Colombo Twin Towers, had allowed an unauthorized forex trading broker to operate by selling forex trading products," a stock market analyst said adding indirectly it creates a bad image to the country's only capital market – CSE and the World Trade Centre (WTC) of Colombo.
"I think Overseas Realty Management should look at their customers' profiles thoroughly before just selling commercial office space to these type of companies in the WTC," he noted.
Link - http://ceylontoday.lk/59-35690-news-detail-another-financial-scam.html
Last edited by UKboy on Tue Jul 09, 2013 12:29 am; edited 3 times in total (Reason for editing : amended the topic. (too long))