Finance Magnates has learnt that JFD Brokers (JFD) closed its office in China in May of this year. According to Doris Zhang, formerly Chief Manager of the Chinese Market at JFD, the firm faced problems with payment service providers (PSPs).
“All brokers were struggling with it and trying to find solutions.” Zhang told Finance Magnates, “Unluckily, all payment solutions were blocked by the authorities.”
There is certainly truth to this. Just last month, Finance Magnates issued a report covering the problems that brokers are facing in China.
At the top of the list were payments. Every broker and consultant that Finance Magnates spoke to had struggled to find an effective means by which to process client funds.
An example of the problems brokers are facing came in late 2017, when the People’s Bank of China (PBoC), the country’s central bank, ordered PSPs to stop working with 40 brokers. These were not small-fry, shady brokers either – IG and Alpari were among the names listed by the PBoC.
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JFD – doing things by the book
Finance Magnates reached out to JFD in order to confirm the office closure. Mihail Kamburov, the broker’s Chief Operations Officer, confirmed that the office had closed but added that this was not the end of JFD’s Chinese business.
“Although we have closed our office in China, we continue serving clients from the country” Kamburov told Finance Magnates on Tuesday.
That the firm is still serving clients in China may explain why the closure of their local office was done quietly. According to Zhang, it was done to prevent any discord amongst those clients.
“They don’t want to make any uneasiness for traders,” said Zhang, “because clients from China are still trading with JFD.”
This would indicate that JFD has trodden a path that many other brokers have already taken. With difficulties inside China itself, many brokers continue to serve Chinese clients from offices outside of the country, particularly in other East Asian countries like Malaysia and the Philippines.
Given the Wild West nature of the Chinese market, however, it’s equally plausible that JFD could be returning to the country. The authorities in China have treated the retail industry erratically and it is entirely possible that they will give their approval to brokers in the future.