Foreign Exchange Brokers Chasing Sport Endorsements Before Industry Clampdown
Spread betting and foreign exchange brokers are "chasing endorsements and sponsorships from Europe's biggest sports names while regulators prepare to clamp down on their marketing to retail investors," according to Murphy & Stafford of the FINANCIAL TIMES. This month, foreign trading services broker Hantec Markets set up a partnership with Premier League side West Ham United and China's Brickhill Capital "cut a similar deal" with EPL club Southampton. They were the "latest deals in the trend of partnerships between small, often unknown brands" offering FX and contracts-for-difference trading and "some of the biggest names in global sport, particularly football." Since last year, Usain Bolt has been "the face of XM," a U.K. broker, while Real Madrid and Cristiano Ronaldo signed up to promote Cyprus-registered broker Exness last month. A "host of big names" from AC Milan, Atlético Madrid, Juventus, Liverpool and Arsenal have also "agreed deals with companies that hitherto had little or no profile in Europe." Those deals "may come into focus next year" when European regulators plan a "continent-wide clampdown on the industry." They are worried that some platforms, which often offer complex CFD and binary options trading, "are not fully explaining the associated risks to unwary users." Consultancy Aite Group analyst Javier Paz said, "There might be some inclination by some of the lesser known CFD providers to strike while the iron is hot -- before the clampdowns become more severe and pronounced" (FT, 9/24).