Hirose UK, the British subsidiary of the Japanese broker, has notified on Thursday that it has stopped taking clients from the European Economic Area (EEA) due to the impact of Brexit on its business.
“Please kindly be informed that Hirose UK will no longer be able to accept clients from the EEA countries due to the BREXIT taking place on the 1st January 2021,” the brokerage stated. “We have already stopped accepting new applications from those countries.”
Hirose UK is regulated by the UK’s Financial Conduct Authority (FCA) and passports its licensing rights to offer services in the European Union.
But, with the upcoming expiry of the Brexit transition, and without any deal between the EU and UK, businesses operating in both the regions are facing uncertainties about their operations.
“If you are from an EEA country and have a trading account with us, your trading account will be closed. If you have a remaining balance in your trading account, please contact us at email@example.com so we can arrange to return your funds back to you,” the announcement added.
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Meanwhile, the business of the Japanese broker is constantly declining in Europe. Its revenue for the last financial year declined by 17 percent annually, resulting in a significant yearly loss.
Moreover, the broker is focusing more on B2B clients in the UK, increasing its base of professional traders.
Brexit and Its Woes
While Hirose is closing its European accounts, many UK-based brokers are gaining licenses from European countries to continue operations of their business in the EU.
As Finance Magnates reported earlier, Interactive Brokers recently opened subsidiaries in Hungary and Ireland. It has already started to migrate East European clients from its UK entity to the Hungarian one.
Furthermore, many brokers are heading towards Cyprus to gain a regulatory license from CySEC.