LeapRate Exclusive… LeapRate has learned that New Zealand based Retail FX brokerage Fullerton Markets has gone (farther) offshore, transferring all business from its NZ entity Fullerton Markets Limited (FML) to a newly created entity in offshore jurisdiction Saint Vincent & the Grenadines, called Fullerton Markets International Limited (FMIL).
Fullerton Markets has been one of the largest New Zealand based Retail FX brokers, and a very visible entity in the country. Fullerton Markets is a front-of-jersey sponsor of the Wellington based Mighty Hurricanes, a perennial favorite in the New Zealand rugby league. Fullerton is headed by CEO Mario Singh, very visible in the FX community not just as the head of Fullerton but also as a noted FX author.
Fullerton has apparently sent out messages to its clients, stating that the reason for the move was to allow its clients to enjoy the dual benefits of faster on-boarding, and a stronger fund safety proposition.
The company apparently is planning to mothball but keep intact its New Zealand corporate entity Fullerton Markets Limited (FML), as the company has built up significant brand equity in New Zealand, especially with its aforementioned sponsorship of the Hurricanes rugby team. The entity will remain within the Fullerton corporate structure in the event it decides to take the company public on the New Zealand stock exchange in the future.
New Zealand has generally had one of the most lax regimes among ‘Western’ countries when it comes to regulating and licensing the Retail FX sector. Originally there was little regulation or licensing to speak of, other than requiring financial related companies to list in the country’s Financial Service Providers’ Register (FSPR). In early 2017 New Zealand required all Spot Forex, CFD and Binary Options brokers (which can still operate legally in the country) to obtain a Derivatives License – still, a fairly mild form of regulation and licensing as compared to other jurisdictions such as Australia or the EU.
Fullerton has apparently delisted itself from the FSPR financial register in New Zealand.
In a recent blog post about the state of the FX sector, Fullerton CEO Mario Singh noted that due to increasing regulatory scrutiny of the online trading industry he expects that brokers will start targeting clients in jurisdictions where regulation is not as strict including some parts of Asia, and that there will be a surge in brokers looking for “more flexible jurisdictions to get licensed”. He specifically mentioned countries like Saint Vincent & the Grenadines, and Seychelles, as two examples. It looks like he is now following his own advice / prediction.
The move comes several months after Fullerton attracted some bad press in New Zealand, after being issued an AML (anti-money laundering) warning from the country’s Financial Markets Authority.
LeapRate spoke with Fullerton CEO Mario Singh on the matter, and he offered the following explanation:
Fullerton Markets is known in the market for our unrelenting commitment to Speed and Service. Our move to St Vincent allows us to provide clients with a win-win proposition of faster on-boarding and stronger fund safety via Fullerton Shield. Fullerton Shield is a triple level fund safety mechanism which comes with professional indemnity and crime insurance by Lloyd’s underwriter, a global billion dollar insurance behemoth.