It has come to our attention that there are companies operating in Namibia assisting individuals with the opening of online investment trading accounts and trading on behalf of clients.
Online trading has to do with placing buy-and-sell orders of shares or other financial instruments with an internet-based brokerage firm on a trading platform without the use of a member of an exchange.
Online trading allows investors to trade in financial instruments on their own without placing funds with an investment manager or trading directly through a stockbroker.
Trades done by stockbrokers on behalf of clients through the Namibian Stock Exchange (“NSX”) are regulated by NAMFISA.
NAMFISA cautions the public that online trading is not a regulated activity and companies or persons doing online trading are not regulated by NAMFISA, unless they are a member of an exchange, supervised by the exchange.
Individuals allowing a third party to trade on their behalf by providing login details to their online investment trading accounts, are doing so at their own risk.
NAMFISA, therefore, advises the public, when dealing with companies or persons offering online trading schemes, to:
• Find out as much as possible about the instruments that you are trading in, the risks of trading in such instruments and the party who bears the risk;
• Always be cautious when allowing a third party to access your online investment trading account with your login details, as the third party might not always execute a trade that is in your best interest;
• Treat any person or company who requires investors to provide them with login details or online investment trading account access for trading purposes with caution; and
• Enquire if the online trading entity is a member of an exchange or not. If not a member, kindly note that the risk of losing money increases.
Investors may suffer financial losses due to several reasons, including negligence contrary to instructions, etc. attributed by the third party when they allow a third party to trade on their behalf.
Investors should be aware that online trading will be done at their own risk.
ENQUIRIES:
NAMFISA
Capital Markets Department
Tel: (061) 290 5140 / 5137
Fax: (061) 290 5157
Email: plubinda@namfisa.com.na
Website: www.namfisa.com.na
