LeapRate has learned that Chinese authorities have been approaching a number of foreign based Retail FX brokers with offices and operations in the country, demanding that they immediately shut down any physical presence in China.
The “roundup” of foreign FX brokers began about two weeks ago during the week leading up to the Chinese New Year (which was Friday February 16). The timing seems to have coincided with the two week period that many Chinese take as vacation time, right after the New Year holiday.
The representatives and management of several FX brokers on the ground in China were summarily called, one by one, to a meeting with regulators. At each meeting, they were faced with something of a show-of-force, with representatives of six Chinese regulatory and government agencies present, including the police.
We detail below in an interview with one of the people who was in one of those meetings exactly what transpired, but in brief each broker was told that it is now illegal to operate as an FX broker in China offering leveraged trading of any kind, and that they had to present a plan as to how they were going to each physically exit China within two weeks (i.e., by the time people get back to work from the Chinese New Year holiday).
We also understand that Chinese authorities are cracking down on those individuals and entities who have been linking up foreign FX brokers with Chinese IBs and money managers, whether or not those brokers have physical presence on the ground in China or not.
While no official pronouncements have yet to be made by Chinese authorities, and we believe that not all foreign FX brokers in the country have yet to be called in for a “discussion” with authorities, we believe that these incidents mark the first step of China banning leveraged trading. China has recently banned cryptocurrency trading which was becoming very popular (perhaps too popular) in the country, and it seems that hot on the heels of that decision they have decided to also ban leveraged FX and CFDs.
Here below is our conversation with BMFN CEO Luis Sanchez, as noted above one of the Retail FX managers who was summoned to and attended one of the meetings with regulators. BMFN is an ASIC and Vanuatu licensed Retail FX broker, which had built up a large presence in China over the past three years, with five offices in four Chinese cities. In less than a month, BMFN has now shut down its entire operation in China.
https://www.leaprate.com/forex/regul...f-the-country/
The “roundup” of foreign FX brokers began about two weeks ago during the week leading up to the Chinese New Year (which was Friday February 16). The timing seems to have coincided with the two week period that many Chinese take as vacation time, right after the New Year holiday.
The representatives and management of several FX brokers on the ground in China were summarily called, one by one, to a meeting with regulators. At each meeting, they were faced with something of a show-of-force, with representatives of six Chinese regulatory and government agencies present, including the police.
We detail below in an interview with one of the people who was in one of those meetings exactly what transpired, but in brief each broker was told that it is now illegal to operate as an FX broker in China offering leveraged trading of any kind, and that they had to present a plan as to how they were going to each physically exit China within two weeks (i.e., by the time people get back to work from the Chinese New Year holiday).
We also understand that Chinese authorities are cracking down on those individuals and entities who have been linking up foreign FX brokers with Chinese IBs and money managers, whether or not those brokers have physical presence on the ground in China or not.
While no official pronouncements have yet to be made by Chinese authorities, and we believe that not all foreign FX brokers in the country have yet to be called in for a “discussion” with authorities, we believe that these incidents mark the first step of China banning leveraged trading. China has recently banned cryptocurrency trading which was becoming very popular (perhaps too popular) in the country, and it seems that hot on the heels of that decision they have decided to also ban leveraged FX and CFDs.
Here below is our conversation with BMFN CEO Luis Sanchez, as noted above one of the Retail FX managers who was summoned to and attended one of the meetings with regulators. BMFN is an ASIC and Vanuatu licensed Retail FX broker, which had built up a large presence in China over the past three years, with five offices in four Chinese cities. In less than a month, BMFN has now shut down its entire operation in China.
https://www.leaprate.com/forex/regul...f-the-country/
