Finance Magnates can confirm that several big companies from the industry are looking to obtain an operating license in Dubai. Sources with knowledge of the matter shared that rather large brokers such as CMC Markets, LCG, Pepperstone, and at least two other major players, have filed their applications with the Dubai Financial Services Authority (DFSA).
The move comes amid increasing regulatory pressures in Europe. Brokers have been actively looking for ways to diversify their exposure to the European market. Further expansion into the Middle East makes sense as the region is home to some of the most populous countries in the world.
Forex and CFDs brokers are heavily relying on the European market for revenues. The initial trading volumes drop resulting from the leverage caps which the European Securities Markets Authority (ESMA) is introducing are likely to be material, at least initially.
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Dubai License Perks
The sudden spike in interest for a Dubai license comes at the same time when EU authorities are rapidly cracking down on brokers who are offering their services in countries where they don’t have the legal right to operate.
As part of a coordinated effort between regulators and private companies, Google announced earlier this spring that it is going to limit some advertising.
Earlier this week we reported on another company joining the regulators in a well-coordinated effort to make the operations of brokers in the industry close aligning to regulatory frameworks globally. Mastercard singled out firms that provide services to retail traders and announced that it is going to start flagging such transactions into a group of high-risk payments.
The DFSA has a solid reputation not only in the region but also worldwide. The process of obtaining a license from the Dubai regulator is considered to be quite rigorous. Some other companies from the industry have recently set up operations there, such as Middle East-focused Amana Capital, AxiCorp, and FxPro.