The Securities and Exchange Regulator of Cambodia (SERC) recently issued a notice warning the public about companies and individuals conducting unlicensed derivatives trading businesses involving gold, foreign exchange and other products, to help prevent losses caused by unclear platform licensing status.
The regulator said some entities are attracting investors through advertising, investment advice and links for opening trading accounts, although they have not obtained a SERC licence or are still in the application process. The entities concerned have been ordered to stop unlicensed solicitation immediately. Investors should verify their licensing status before opening an account or depositing funds.
The warning does not mean Cambodia has banned gold or foreign-exchange derivatives trading. SERC’s lists of licensed institutions and approved products cover contracts for difference (CFDs) on foreign exchange, gold, silver, crude oil and stock indices, including gold against the US dollar (XAU/USD).
A report published by the International Monetary Fund (IMF) in August this year said Cambodia began developing its derivatives market in 2017. Over-the-counter trading is now mainly in CFDs, with gold CFDs particularly popular among retail investors. Leverage on some products can reach 1:200.
However, high leverage can amplify both gains and losses. The IMF also noted that scams and limited financial literacy among investors are undermining confidence in the local capital market.
Investors should therefore avoid making decisions solely on the basis of a platform’s claims of an “international licence” or promises of high returns. They should check SERC’s lists of licensed institutions and approved products, carefully assess trading risks and protect their funds.
