Beware of easy-money schemes via Internet
By Waleed PD Mahdini

Bandar Seri Begawan - The Ministry of Finance has cautioned investors engaging the services of brokers operating through websites because none of these is licensed or authorised by the Government.

The ministry "has not issued any licenses to any brokers or their agents in Brunei Darussalam to conduct Internet trading in commodities such as gold or foreign currencies", Hj Mohd Rosli Sabtu, special duties director at the Brunei International Financial Centre (BIFC), said in a statement.

Hj Rosli advised investors to verify with the ministry the licence status of any company or broker before investing in any financial products, including those sold online.

This will help them avoid risking their money in financial products that may be peddled by unlicensed companies or unauthorised representatives in Brunei, he explained.

Think twice, Hj Rosli said, when a broker operating online dangles easy profits from trading in a spot commodities, indices or foreign currencies, and requires an investor to deposit money as a so-called margin for trading.

"Margin trading is highly risky as it involves investors borrowing from the person (online broker or brokerage firm) whois operating the Internet site," Hj Rosh said.

Margin trading resembles trading on overdraft, but it is worse because if the value of investment falls, the broker who has lent the "margin" expects the investor to deposit more money into an account, he explained.

And if this additional money is not deposited immediately, then the margin provider sells the product or investment to another person without consulting with or giving the first investor a chance to repay the loan.

Investors, therefore, should not engage the services of illegal spot trading companies whose representatives usually claim to be agents or facilitators of foreign trading houses, he said.

Anybody found operating, or assisting the operation of, an unlicensed securities market including foreign currencies market is committing an offence punishable under Section 5 (2) of the Securities Order 2001, which carries a maximum fine of up to $1,000,000 or 10-year imprisonment or both.

Hj Rosli also encouraged Bruneians to report all possible unlicensed activities or individuals, suspicious websites, e-mails or any information relating to investment advice and services on the Internet. They can contact the ministry through the BIFC at telephone numbers 2383763 and 2383790 or bifc@finance.gov.bn.

No Brunei residents have been reported to have lost savings to these investment schemes.

Ministry officials, however, deemed it best to remind Bruneians, who have been encouraged to develop a savings culture, not to fall prey to these highly risky operations.

Life BIFC was set up in 2000` with an aim to develop Brunei Darussalam as a primary financial centre while maintaining a professional business reputation, good global citizenship and good governance.

His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam called for the establishment of the BIFC in his birthday titah on July 15, 2000, with a particular focus on "Islamic financing."

The move to create an international financial centre is expected to support the effort to diversify the economy. Based on latest statistics from the BIFC, more than 5,000 international business companies, such as Bank Paribas, OCBC and the CIMB, are now registered with the centre.  -- Courtesy of The Brunei Times

Click Here To Have Your Say On This Story

Brudirect.com News

Brunei's Fastest Growing Website with