Reports in Chinese media suggest that FXCM is migrating Chinese clients to its subsidiary in the Bahamas.
According to a report released on Thursday by Sohu, a news outlet based in Beijing, traders that were using the services of the retail broker’s Australian entity are now allowed to move. To be clear, traders have a choice – they are not being forced to move, it said.
The news site said that customers received an email from the broker, saying that they had until October 19th to apply for a new account with the Bahamas entity. Account transfers will also take place at the beginning of November.
Although Sohu’s report focused on Chinese clients, it’s likely that FXCM’s Australian branch will be transferring all of its non-Aussie customers to other entities.
Clampdown in the Land Down Under
That’s because of pressure from Australian authorities that has been increasing over the course of this year.
In April, the Australian Securities and Investments Commission said that brokers should stop doing business with non-domestic clients.
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Though that applied to all foreign customers, ASIC’s decision to issue the statement appears to have been the result of pressure from Chinese authorities.
Since the regulator made that order, some brokers have actually done what was asked of them.
Several companies have emailed clients, telling them that they would no longer be able to access their Australian entities and that they would be transferred to other entities.
But not everyone has done the same.
IC Markets, for example, said in June that it would be migrating client accounts to its Seychelles entity. Shortly afterward, however, the broker backtracked and said that clients could continue trading with its Australian division.
ASIC did instruct brokers to stop providing services to foreign clients by the end of June, but that appears not to have happened, with companies split on whether or not they should actually follow the financial regulator’s instructions.