The Monetary Authority of Singapore’s (MAS) suspension of Samtrade FX’s operations has left account holders in limbo. With individuals unable to move money out of their Samtrade FX accounts, a Q&A update from the firm highlights the risks of using an unregulated broker.
What Happened At Samtrade FX?
The clampdown on the broker’s operations by MAS, the Commercial Affairs Department (CAD) and Singapore Police followed the broker being placed on the Investor Alert List in July 2021, and further developments led to three of the broker’s staff being arrested on 28th December. The outcome has been that all of Samtrade FX’s operations are currently suspended while MAS investigates whether the firm has breached regulations.
What Happened To Investor Funds Held in Samtrade FX Accounts?
It’s hard to know whether this will ultimately prove to be good news or not and whether client funds have been removed.
Samtrade FX states that management and the company’s officers are restricted from accessing accounts holding customer deposits. This is due to a ruling issued by Singapore based CAD that has been applied to overseas business operations as well as in Singapore. Account opening, account changes, settlements and payments are all currently blocked.
How this matter is resolved is yet to be confirmed. Samtrade FX, in a statement, said it is “seeking legal advice to consider options related to gaining access to the clients’ deposits to meet any withdrawal request by customers“. However, there is no advice given on whether client funds are intact. Establishing whether money is missing will offer some clue as to whether it is the firm’s staff or representatives of the authorities who will take over future processing.
Old Advice Can Be The Best Advice
The Singapore authorities have sent Samtrade FX account holders and other traders a painful reminder. There is nothing new in the text provided by MAS, which stresses the need to follow the basics when choosing a broker.
They recommend that members of the public can verify if an entity has a valid licence by checking MAS’ Financial Institutions Directory.
“They can also check MAS’ Investor Alert List, which is a list of unregulated persons and entities who, based on information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS. MAS’s regulatory framework seeks to ensure that only competent and professional persons may provide regulated financial services. If you choose to deal with unregulated entities or persons, you will forgo the protection under MAS’ regulations.”
It couldn’t be clearer that using a trusted broker is the first and most crucial step towards making a return in the markets.
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