Polish FX brokerage XTB today suspended its plans to cease operations in Turkey until the end of the first half of 2018, as the listed company expects Turkey’s authorities to retreat from a number of limits to the forex business that were introduced earlier this year.
XTB’s decision builds on advice given by a law firm operating on the Turkish market. Earlier in February, the CBM introduced amendments in leveraged forex trading transactions. The board brought a minimum margin of TL 50,000 (USD13,840) and the leverage was rearranged as 10:1. Previously, before the amendment, it was 100:1.
XTB stated earlier that it expects that the CMB initiative will significantly reduce overall activity in Turkish retail forex trading. It also said that these drastic changes to the regulatory structure have contributed to a considerable decline in the number of customers and consequently to a significant reduction in the activity of XTB Group in Turkey.
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XTB’s decision to withdraw from this market was also based on the recent economic and political situation in Turkey which, in the company’s opinion, has also affected the business environment and triggered uncertainty in this market.
According to information from the XTB website, the decision to shut down its Turkish subsidiary will affect the current financial situation. Specifically, it will require that the value of the shares of its Turkish unit be written off, which equal PLN 9.7 million ($2.55 million).
Furthermore, the company has intended to separately create another write-off of the value of its intangible assets to reflect the shutdown of its brokerage activities license in Turkey. This amounts to approximately PLN 5.6 million ($1.47 million).