Ron Finberg of Cappitech made the statement during the Shoring up Operations: Trends in Regulation panel at the iFX expo.
Regulation will not cause the death of the foreign exchange (Forex) industry - brokers already caused the death of the asset five years ago. That statement was made by Ron Finberg, Business Development of Cappitech at the 2019 iFX expo in Cyprus while speaking on the Shoring up Operations: Trends in Regulation in 2019 panel.
In 2018, the FX industry in Europe was transformed thanks to regulators clamping down on bad practices and making investor protection their top priority. Since then, brokers have had to change the way they do business and invest more in their compliance department to ensure they stay up to date with regulation.
One of the biggest questions to arise from these changes is, will regulation be the death of the FX industry? According to Finberg, bad practices and poor marketing already caused the end of the FX industry five years ago. Now, brokers need more than offering FX for trading. They need other assets such as contracts-for-differences (CFDs), stocks, indices, etc.
Rod Martenstyn, the CEO & Founder of OSS Consult Ltd, agrees with this, stating that the regulations in the European Union (EU) didn’t come from nowhere, they were in response to the culture that many regulated firms in the FX and CFD sector had.
Instead of blaming regulators, Martenstyn believes that brokers should be using this opportunity for self-reflection and trying to improve the culture not only within their own company but within the industry as a whole.
“Regulatory interventions are the effect, and the cause – there’s been a historic culture issue with regulated firms in the CFD/FX sector, and there needs to be sometimes some self-introspection from the sector as to identifying their culture gaps and addressing their regulatory gaps as well,” Martenstyn said at the panel.
“I don’t blame the regulators for the death of the industry; there need to be some honest words and some self-introspection of regulated firms,” he continued.
The Rise of Offshore Brokers
As a result of the tightening regulations in the EU, brokers are now looking offshore to try and onboard clients from geographies outside of Europe. However, in terms of offshore destinations, Martenstyn suggests there are two categories - reputable destinations such as Singapore and Australia, and the less so such as the British Isles, Seychelles, Bahamas, Marshall Islands, and Vanuatu.
Specifically, Martenstyn suggests that brokers setting up an offshore office in one of the latter locations only have a “short-term” view in mind and aren’t considering the fact that these places are labeled “high-risk” and can be difficult to set up a bank account in the United Kingdom and other areas.
Australia’s Safe Haven Status is Quickly Disappearing
Australia is also a popular offshore destination, and it also falls under the “reputable” category. In fact, Australia was at one point considered to be a safe haven as it offered brokers a place to set up an office in an established market with less restrictive regulation.
However, it seems that time may be coming to an end. As Finance Magnates reported, the Australian Securities and Investments Commission (ASIC) has clamped down on brokers onboarding clients outside of Australia, and more specifically China.
On this issue, Finberg highlighted: “One conspiracy theory, which I believe is a sound reasoning behind all of this - there is a tariff war going on between the US and China and Australia is sitting in the middle… So they say ‘OK fine’ if we make these changes and we say that we won’t have Chinese customers so easily in Australia, that may be a way to appease the Chinese government.”
Not only that, but rumors and fears continue to mount that the Aussie regulator is going to follow in the footsteps of the European Securities and Markets Authority (ESMA) and implement product intervention measures that will restrict Leverage, amongst other changes. Martenstyn summed up this issue by saying, “it’s going to happen eventually.”
Regulation will not cause the death of the foreign exchange (Forex) industry - brokers already caused the death of the asset five years ago. That statement was made by Ron Finberg, Business Development of Cappitech at the 2019 iFX expo in Cyprus while speaking on the Shoring up Operations: Trends in Regulation in 2019 panel.
In 2018, the FX industry in Europe was transformed thanks to regulators clamping down on bad practices and making investor protection their top priority. Since then, brokers have had to change the way they do business and invest more in their compliance department to ensure they stay up to date with regulation.
One of the biggest questions to arise from these changes is, will regulation be the death of the FX industry? According to Finberg, bad practices and poor marketing already caused the end of the FX industry five years ago. Now, brokers need more than offering FX for trading. They need other assets such as contracts-for-differences (CFDs), stocks, indices, etc.
Rod Martenstyn, the CEO & Founder of OSS Consult Ltd, agrees with this, stating that the regulations in the European Union (EU) didn’t come from nowhere, they were in response to the culture that many regulated firms in the FX and CFD sector had.
Instead of blaming regulators, Martenstyn believes that brokers should be using this opportunity for self-reflection and trying to improve the culture not only within their own company but within the industry as a whole.
“Regulatory interventions are the effect, and the cause – there’s been a historic culture issue with regulated firms in the CFD/FX sector, and there needs to be sometimes some self-introspection from the sector as to identifying their culture gaps and addressing their regulatory gaps as well,” Martenstyn said at the panel.
“I don’t blame the regulators for the death of the industry; there need to be some honest words and some self-introspection of regulated firms,” he continued.
The Rise of Offshore Brokers
As a result of the tightening regulations in the EU, brokers are now looking offshore to try and onboard clients from geographies outside of Europe. However, in terms of offshore destinations, Martenstyn suggests there are two categories - reputable destinations such as Singapore and Australia, and the less so such as the British Isles, Seychelles, Bahamas, Marshall Islands, and Vanuatu.
Specifically, Martenstyn suggests that brokers setting up an offshore office in one of the latter locations only have a “short-term” view in mind and aren’t considering the fact that these places are labeled “high-risk” and can be difficult to set up a bank account in the United Kingdom and other areas.
Australia’s Safe Haven Status is Quickly Disappearing
Australia is also a popular offshore destination, and it also falls under the “reputable” category. In fact, Australia was at one point considered to be a safe haven as it offered brokers a place to set up an office in an established market with less restrictive regulation.
However, it seems that time may be coming to an end. As Finance Magnates reported, the Australian Securities and Investments Commission (ASIC) has clamped down on brokers onboarding clients outside of Australia, and more specifically China.
On this issue, Finberg highlighted: “One conspiracy theory, which I believe is a sound reasoning behind all of this - there is a tariff war going on between the US and China and Australia is sitting in the middle… So they say ‘OK fine’ if we make these changes and we say that we won’t have Chinese customers so easily in Australia, that may be a way to appease the Chinese government.”
Not only that, but rumors and fears continue to mount that the Aussie regulator is going to follow in the footsteps of the European Securities and Markets Authority (ESMA) and implement product intervention measures that will restrict Leverage, amongst other changes. Martenstyn summed up this issue by saying, “it’s going to happen eventually.”
TradeStation and Coincheck Drive Monex's 850% Profit Surge
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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