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MFSA Warning Addressed to Consumers Regarding the Risks Related to Investing in Highly Volatile Financial Instruments

24 Mar 2021 11:10 | Anonymous
The MFSA would like to remind financial services consumers especially retail investors to be careful when trading in highly volatile shares. When consumers invest in certain financial instruments, the price of which is highly volatile, they should keep in mind the risks associated with these type of investments and keep in mind that they can lose part or all of the money invested. It is very important that consumers understand the features of the financial instruments they would like to invest in especially the risks associated with that investment and the implications that such risks may pose.
Consumers should invest in a financial instrument if that product meets their needs and the decision to invest or otherwise should not be based on media hype. Retail investors should always get the required information from reliable sources. Consumers should always transact with licensed entities and should always check the fees that they will incur. In particular, retail investors should consider consulting an investment advisor before investing in this type of financial products and should always assess the risk involved in particular if the investment to be undertaken involves trading on margin.
Consumers are also encouraged to read the statement issued by the European Securities and Markets Authority (‘ESMA’) on the risks connected with trading decisions based exclusively on exchanges of views, informal recommendations and sharing of trading intentions through social networks and unregulated online platforms. This statement may be accessed here.
               
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