Beware! Ultima Markets is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
Ultima Markets promises its clients the best trading conditions and tries to give the impression that it is a regulated forex broker. But closer inspection reveals that it is an unregulated offshore broker offering basic level financial services at best. Let’s take a closer look at the case of Ultima Markets and whether it is an advisable choice of broker.
ULTIMA MARKETS REGULATION AND SAFETY OF FUNDS
The most important information about a financial services provider is its regulatory status. Licensed brokers provide detailed information about which company runs them, where it is based, which jurisdictions it is authorised in and which regulatory bodies oversee its activities.
The home page of the website provides the details of two companies. One is Ultima Management Pty Ltd, based in Australia and licensed by the Australian Securities and Investments Commissions (ASIC).
The other is Ultima Markets Ltd, registered offshore in the Saint Vincent and the Grenadines (SVG). The Client Agreement makes it clear that we are dealing with this particular offshore company, and not the ASIC-regulated one.
In fact, we have been unable to find evidence of a link between this Australian company and this website. Deposits to the Ultima Markets are made to the account of a different Australian company, Ultima Global Pty Ltd.
You should be aware that if you choose Ultima Markets as your broker, you will be working with an offshore company that is not subject to regulatory control.
SVG is an offshore zone with no broker regulations in place. As soon as you open the website of the local Financial Services Authority you see a warning that the institution does not licence forex and other types of brokers and does not supervise the activities of International Business Companies engaged in such activities.
If you have decided to invest in financial instruments, and especially if you are a novice trader, you should use the services of a licensed broker based in a jurisdiction with strong regulations.
Depending on your location, it is advisable to choose a company that is regulated by an institution such as ASIC, Commodity Futures Trading Commission (CFTC) in the US, UK’s Financial Conduct Authority (FCA) or some EU regulator like Cyprus Securities and Exchange Commission (CySEC).
Clients of these brokers receive protections such as negative balance protection and segregation of the client’s funds from the broker’s funds. In the EU and the UK, brokers must also participate in guarantee schemes that cover a certain amount of the trader’s investment if the broker becomes insolvent. These guarantees amount to up to 20 000 EUR in the EU and 85 000 GBP in the UK.
However, the likelihood of such a bankruptcy is low because regulators also have significant net capital requirements that companies must maintain – EUR 730 000 in UK and Cyprus, AUD 1000 000 in Australia and at least 20 million USD in the United States.
ULTIMA MARKETS TRADING SOFTWARE
Ultima Markets uses the MetaTrader 4 (MT4) platform, which has long been the industry standard but is increasingly being superseded by a newer version of the software, MT5. Here’s what the platform looks like using a Demo account:
There are plenty of established, regulated brokers who enable their clients to take advantage of MT4 and MT5‘s capabilities.
These platforms have established themselves as leaders because they offer a wide range of features, including a wide variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.
ULTIMA MARKETS TRADING CONDITIONS
Ultima Markets offers trading in a large number of currency pairs, indices, commodities and stocks. The trader has a choice between a standard account type, where he pays only the spread, or an ECN account, where he can rely on the raw spread but pays a fixed commission per lot traded.
In the trading platform we see a spread of 1.2 pips, which is a relatively competitive level.
Leverage for all account types reaches 1:500. This is not a level that you see with regulated brokers. Trading with high leverage allows higher profits, but also increases the risk of sudden and excessive losses proportionally. All leading regulators limit leverage for retail traders.
In the EU, UK and Australia the maximum permitted level is 1:30 and in the US it is 1:50. This maximum level only applies to trading major currency pairs, with even more limited leverage for more volatile assets.
Regulated brokers offer higher leverage only to professional clients who must meet very high standards for capital and experience and forgo the guarantees enjoyed by retail traders.
Ultima Markets also offers deposit bonuses, which is further evidence that it is not a broker operating under the regulatory requirements of the ASIC. Most financial regulators prohibit brokers from offering bonuses.
If you are willing to take the risk of trading with high leverage and benefit from bonuses and promotions, the best option is to invest through an offshore division of an established brand.
The minimum deposit required by Ultima Markets is 50 USD. For the same or often lower amount you could start trading through a well-established and regulated broker.
ULTIMA MARKETS DEPOSIT/WITHDRAW METHODS AND FEES
Ultima Markets allows depositing funds via international and local bank transfer, credit cards, UnionPay, MobilePay and cryptocurrencies. You should be aware that wire transfer and cryptocurrencies do not allow you to request a refund or chargeback.
Leading brokers typically offer clients a wide choice of transparent payment methods, including established e-wallets such as PayPal, Skrill, Neteller and Sofort.
Ultima Markets states that it does not charge transaction fees. If an account uses a bonus, withdrawing funds from the balance will result in the bonus being withdrawn.
HOW DOES THE SCAM WORKS
With all the buzz surrounding cryptocurrencies and NFTs, many people are starting to consider investing in the financial markets as a bid to improve their fortunes. Scammers on the internet have taken notice of that and take advantage of the ignorance of the general public by creating countless websites posing as brokers. These websites offer no real brokerage services and only deceive people into believing that their money is really being invested.
If you come across such a scam website and give out your contacts, you will be contacted by experienced scammers who will convince you that they can take on all the frighteningly complex aspects of investing for you. But you will never get any real profits, nor will you be able to get back the money you deposited. The terms and conditions of these websites are riddled with clauses that make withdrawing funds from your account unfeasible – for example, extremely high minimum trading volume requirements or hefty fees of 10%, 20% or even more of the amount.
Scammers hide behind fake addresses and names and operate through offshore companies that are not subject to regulation and scrutiny. So even if all the withdrawal requirements are met, they may simply disappear and move on to their next fraudulent scheme.
WHAT TO DO WHEN SCAMMED
It is very important not to rush into trusting people on the internet who offer to magically refund your money for a fee. These are also scammers, and they may even be the same ones who scammed you in the first place.
If you have made the transfers using credit or debit card, you can claim a chargeback. Visa and MasterCard allow this to be done within 540 days. However, such a request may not be approved if you have given the fraudsters documents such as a copy of an ID and proof of address. This will allow them to claim that the transaction is legitimate and approved by both parties.
