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Screenshot of a breaking news alert e-mail from Q2 2017
LeapRate Exclusive… LeapRate has learned that leading online FX and CFD broker Plus500 Ltd (LON:PLUS) has decided to halt its Revshare payments with affiliates in its 500Affiliates.com program ahead of MiFID II regulations, moving instead to an all-CPA (cost-per-acquisition) model.
While most affiliates of FCA and CySEC licensed Plus500 have been working with the CPA model to date, receiving a fee from Plus500 for each new client they refer to the broker, many affiliates chose instead to receive a portion of the spread revenue Plus500 earns over time from the referred clients, called Revshare. A number of affiliates also work on a hybrid small-CPA-payment plus Revshare model.
The change to all-CPA takes effect at Plus500 as of January 1, 2018.
The reason for the change is new MiFID II regulations which EU licensed brokers will need to follow, which kick in as of January 3, 2018. MiFID II allows affiliates to receive Revshare payments from brokers, but only under certain conditions, such as when the client continues to receive some sort of tangible benefit from the affiliate. The rule was put in place by EU regulators to prevent financial affiliates from aggressively encouraging the clients they refer to deposit and churn their accounts.
Brokers such as Plus500 can continue to offer Revshare under the new MiFID II imposed conditions, but we believe it will be incumbent upon the broker to then somehow monitor the activity of the affiliate, and ensure that the Revshare requirement rules are being followed – something which will be very difficult to do, and which could open the broker to problems down the road.
LeapRate has learned that for the past four months already Plus500 has only been signing up new affiliates to the CPA model, and is now moving over its existing Revshare and hybrid affiliates to CPA as well.