In recent years, services specifically designed for individuals to trade on international financial markets in complex derivative financial instruments, such as contracts for difference (CFDs), the regulation and supervision of which are limited at the national and international levels, have been actively promoted on the territory of Moldova.
In particular, as a result of the use of such services, citizens have complained, through applications to public authorities, of financial losses and requested assistance in recovering funds transferred to the accounts of various foreign companies. It was found that retail (non-professional) investors from Moldova risk investing in high-risk investments, including those associated with high leverage (e.g., 1:100, 1:500), thereby increasing their losses. “These concerns are exacerbated by often aggressive trading methods and improper practices of providers who promote, distribute or sell CFDs with inadequate risk disclosure,” the explanatory note to the draft law says.
These actions will now fall under the CC. Fines will be introduced for violators: from 10 thousand to 20 thousand conventional units or imprisonment up to 3 years – for individuals; from 20 thousand to 40 thousand conventional units with deprivation of the right to engage in certain activities or with liquidation of the legal entity – for legal entities.
In case of infliction of damage in especially large amounts, sanctions will be increased.
Reference: A contract for difference (CFD) is an agreement between two parties – a seller and a buyer – to transfer the difference between the current value of an asset at the time of conclusion of the contract (opening a position) and its value at the end of the contract (closing a position). Although in form a contract for difference is very similar to a contract for delivery of goods, but the seller is not obliged to own the real asset and the buyer does not get the rights to demand delivery. If the price of the asset has increased between the first and second transaction, the buyer will receive the difference in price from the seller. If the price decreased, the seller will receive the difference in price from the buyer.
