After the latest batch of changes to the EU’s retail broker regulatory framework, European brokers have been looking for ways to divest their geographical reach. The same however appears to be valid for Australian brokers, who are actively pursuing opportunities to attract EU clients.
FP Markets is the latest company from the land down under to acquire a license from the Cyprus Securities and Exchange Commission (CySEC). In the final quarter of last year, one of the biggest Australian brokers, ICMarkets also acquired the permit to operate in the EU but is yet to officially launch its operation.
FP Markets has registered the .eu domain name, and at present is stating that it is not offering its services yet. The company is preparing to start welcoming clients from the EU in the near future.
After acquiring a license from the CySEC in October of last year, the European branch of ICMarkets also hasn’t started its operations yet. The company is showing a similar message on its .eu domain website.
Two-Way Traffic of Australian and EU Brokers
While some EU brokers are seeking licenses in Australia, Australian brokers with an established foothold are looking for ways to onboard more European clients.
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Every retail broker advertising its services to clients in the EU is obliged to hold a valid regulatory permit. Google Ads policies could be another limitation which brokers are aiming to circumvent.
At present, the search giant requires brokers to provide it with a legal opinion that they are allowed to advertise in any jurisdiction they choose to.
Over the past couple of years, European brokers have been actively looking for ways to acquire an Australian license. The local regulator, ASIC, has been notoriously difficult towards retail brokers only recently allowing a new brokerage to obtain one for offering forex and CFDs. As Finance Magnates exclusively reported, that company is Fortrade.
Despite the challenging regulatory environment globally, companies are continuing to come up with creative ways to attract new customers. While EU citizens are looking for high leverage offshore, the regulated part of the industry has been shifting towards STP execution at a point in time when spreads are starting to matter more.
Traditional market makers on their part have been migrating offshore, while the big, strongly capitalized brokers have increased spending to attract more new clients to their established brands.