XTB Might Leave Turkey Over New FX Limitations, More to Follow?

Harsh new restrictions on forex trading are forcing brokers to reconsider their operations in Turkey.

Publicly listed Polish forex and CFDs trading firm X-Trade Brokers (WSE:XTB) has notified investors about the possible limitation of its operations in the Turkish market. This was done after a preliminary analysis by the brokerage on the impact of recent regulatory changes in Turkey.

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As we exclusively reported on Friday, the Capital Markets Board of Turkey (CMB) – the national financial regulatory and supervisory agency – announced a raft of changes to its forex regulations with immediate effect. These include a very high minimum deposit of TRY 50,000 (about $13,500) and a very low maximum leverage of 1:10.

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XTB wrote to its shareholders: “Currently the Group is working on full implementation of the above requirements. As at the day of preparation of the foregoing current report, the Company is not able to estimate precisely what impact the amendment would have on clients activities on the Turkish market and on their transactions. It cannot be excluded that such significant limitations introduced by CMB could contribute to significant decrease in the number of clients, and as a result to significant limitation of the XTB Group’s operations in Turkey.”

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This marks the first time that an international online brokerage has made a statement on the issue, and as expected, it might lead to fewer legitimate domestic options for Turkish clients looking to trade.

The local industry is already up in arms over the issue. They have organized a petition protesting to the regulators that the limitations might push Turkish traders to unregulated offshore operations, exposing them to risks and avoiding the regulations that are meant to protect them all together.

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