Retail foreign exchange broker FXTM announced on Friday that is had obtained a license from the Financial Services Commission (FSC) in Mauritius.
FXTM already has regulatory licenses from the Financial Conduct Authority, the Cyprus Securities and Exchange Commission and the South African Financial Sector Conduct Authority.
“Mauritius is fast becoming an internationally recognised financial supervisor with a strong legal framework, providing protection to the public in non-banking financial products,” an FXTM spokesperson said.
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“International customers will now have the opportunity to receive services through [the newly regulated entity]. Clients will continue to enjoy the same great service they have come to expect from FXTM.”
Fleeing Europe’s low leverage for offshore
The move by FXTM, which is headed up by Alpari co-founder Andrey Dashin, comes after several European brokers reported a lengthy period of declining trading volumes. Low volatility aside, that decline in volumes stems from the European Securities and Markets Authority’s decision to cap leverage in August of last year.
Those leverage caps, where were part of a wider set of fresh regulatory strictures, have forced many firms to look to new jurisdictions, outside of Europe, for regulatory licenses. In the past year, we have seen firms getting licenses in, amongst other places, South Africa and the Bahamas so that they continue providing high leverage to their clients.
Mauritius has also emerged as an interesting regulatory jurisdiction for brokerages. Unlike some of the less savory options available to firms, Vanuatu comes to mind, the island nation has a competent financial regulator and provides access to banking solutions which meet the needs of brokerages.