Foreign exchange and CFDs brokerage Blackwell Global has become the latest addition to the list of Financial Conduct Authority (FCA) regulated companies. The firm received a matched principal license after deciding to raise its profile across the European and global markets.
Blackwell Global already holds a MiFID license from CySEC (Cyprus Securities and Exchange Commission), however with the increasing number of brokers on the island it sought to raise its profile. As of today, the UK FCA is the most prominent regulatory watchdog in the retail foreign exchange and CFDs industry.
Due to stringent policies, clients of brokerages that have been experiencing difficulties have always been compensated by the UK Financial Services Compensation Scheme. Last year, a number of retail clients of Alpari UK, were fully compensated up to the amount of £50,000, albeit with some delays due to the size of the bankruptcy.
Finance Magnates spoke to the the CEO of Blackwell Global, Patrick Latchford, who shared that the FCA licensing process took about seven months.
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“We have acquired the FCA license for a number of reasons – we are strong in Asia, and we don’t have a particularly high profile in the European markets. We think that our clients globally will all be more keen to interact with an FCA licensed entity, since its a stamp of quality all around the world,” he explained.
The company is holding a matched principal license which means that all clients of the Blackwell Global who are onboarded through the FCA regulated entity will receive an STP (Straight Through Processing) service. Many clients choose to trade with brokerages which are not making markets, due to the inherent conflict of interest.
Explaining about the regulatory licenses of the company, Latchford elaborated: “We plan to keep both licenses and we have the London operation with our core retail product on MT4, indices, key commodities and metals as well as providing a service to large individual clients, and some institutional clients.”
“Blackwell Global has not been committed to dedicate big marketing efforts in the UK, because of the highly saturated market in the country,” Latchford explained.
Looking at retail foreign exchange CFDs trading clients, the market share of the top three companies, IG, CMC Markets and City Index, is substantially higher when compared to the smaller players. Therefore the costs associated with effective marketing efforts in the UK are close to prohibitive for smaller brokers for the time being.