We had reported back in February that Retail FX and CFDs broker FXTM has received a license from the FCA for a new UK-based subsidiary Forextime UK Limited, and was launching a London-based operation.
Why add the FCA license to a broker already licensed in several jurisdictions, including the EU (Cyprus)?
We’re pleased to present the following guest post from the perspective of Martin Couper, Director and Head of Compliance at FXTM UK.
2008’s catastrophic financial crisis might have started to fade from public consciousness, but the world of finance is still reeling from its implications a decade on. While there can be no understating the economic hardship experienced by everyone from global corporations to private individuals during the crisis, the subsequent regulatory soul-searching resulted in wholesale changes to the way financial services firms operate.
Loopholes and back doors slammed shut, while strict regulation prioritised protecting consumers and their money – an important step in the finance sector’s public rehabilitation. Firms that complied with these reactive initiatives sought recognition of their efforts in the form of licensing from the appropriate regulatory authorities. These licences provide consumers with confidence and valuable peace of mind when selecting a financial service. In line with industry-leading firms, FXTM applied for, and was granted, a Financial Conduct Authority (FCA) licence.
There were many good reasons to apply for the FCA licence, not least of which was our desire to reassure our clients that they are dealing with a fully-compliant, fully-regulated broker. Financial services companies now operate under the weight of a significant compliance mandate. We are thrilled to have qualified and are now looking forward to operating in the UK.
Lessons learned during the credit crunch mean that regulation post-2008 is considerably more fluid than before. In this ever-shifting landscape, firms must pay close attention to regulatory compliance, as well as strict legislation concerning client communication and transparency. Combined with the looming uncertainty of Brexit, securing the appropriate licensing was a top priority for FXTM.
We want to make sure that potential new legislation does not interrupt the services we provide to our clients. How international companies will operate post-Brexit is unclear, so we deemed it prudent to ensure there are strategic plans in place that guarantee business-as-usual for our clients, whatever shape the final Brexit agreement takes.
FCA certification is particularly important for financial services firms that seek to operate in the United Kingdom and greater European Union generally. As the UK’s foremost financial authority, the FCA regulates over 125,000 approved persons and 56,000 companies. For perspective, these companies and individuals represent approximately 12% of the UK’s entire GDP. In order to ensure a consistent regulatory standard, the FCA works closely with pan-European organisations like the European Securities and Markets Authority (ESMA).
FXTM already operates under both CySEC (Cyprus Securities and Exchange Commission) and FSB (South Africa’s Financial Services Board) licences; the addition of the much sought-after FCA licence enhances FXTM’s activities in Cyprus, South Africa and beyond and allows access to a significantly broader market. This expansion reflects FXTM’s outstanding growth in 2017 – the company reported a 77% year-on-year increase in client base, as well as a 64% rise in the number of active clients. We attribute these impressive figures to FXTM’s industry-leading educational programmes and a client-focused approach.
We have always believed that an educated client is our best client; therefore, developing materials that will enhance traders’ knowledge of trading and markets is top priority. We look forward to providing our UK traders with the same standard of services and education as our existing global clients.
Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.
Risk Warning: There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice.
NOTES TO EDITORS
The FXTM brand provides international brokerage services and gives access to the global currency markets, offering trading in forex, precious metals, Share CFDs, ETF CFDs, and CFDs on Commodity Futures. Trading is available via the MT4 and MT5 platforms with spreads starting from just 1.3 on Standard trading accounts and from 0.1 on ECN trading accounts. Bespoke trading support and services are provided based on each client’s needs and ambitions – from novices, to experienced traders and institutional investors. ForexTime Limited is regulated by the Cyprus Securities and Exchange Commission (CySEC), with licence number 185/12 and licensed by the SA FSB with FSP number 46614. Forextime UK Limited is licensed with the UK FCA, number 777911. FT Global Limited is regulated by the International Financial Services Commission (IFSC) with license numbers IFSC/60/345/TS and IFSC/60/345/APM.