Obtaining an Australian license is even 4 millions of USD

Brokers Escape to Australia? It is true that such a clear trend has not been observed (at least based on the licenses already obtained), but if someone had such plans, it is possible that he will have to change them now. Australian financial supervision, ASIC, radically increased the cost of obtaining a license to provide brokerage services in stock exchange trading, including Forex. According to proven sources, the price is currently as much as USD 4 million.

Escape from ESMA braked

The introduction of restrictions in European regulations can undoubtedly be combined with the decision of ASIC. Raising prices for issuing licenses is likely to stem the inflow of new applications from brokers from EU territory who are looking for alternative jurisdictions to continue their business. This is certainly a move that is conducive to domestic business, but also a warning signal that traders trading with Australian brokers can expect some changes in the future.

It is also interesting to note that the same phenomenon is being observed, where Australian companies decide to obtain licenses in Europe, mainly in Cyprus and the United Kingdom (eg Pepperstone, AxiTrader and IC Markets). It's just that this option is less attractive and at the same time incomparably cheaper. In the case of Cyprus, you can find information that obtaining a brokerage license is the cost is only from 4000 EUR to 10 000 EUR depending on the type of services provided (including the costs of preparing documentation and capital requirements, it starts with a minimum of 300 000 EUR), and the procedure takes about 4 months.

In search of more leverage

The so-called phenomenon Regulatory arbitrage is becoming increasingly popular. Owning by Forex brokers more than one license is a slow standard. An alternative is also the creation of capital groups, which include more than one brand operating under various jurisdictions.

Thanks to this treatment, brokers have the opportunity to expand the territory of their operation and at the same time offer more to customers, such as for more leverage or more interesting promotions. In this respect, an alternative to Australia is represented by countries such as the Bahamas, Vanuatu, Marshall Islands, Belize and BVI. In economic and time terms, this solution is exceptionally tempting, but it certainly is not conducive to a higher level of trust and security on the part of investors.

In Europe, the only alternative to escape ESMA's limitations is Switzerland. Nevertheless, the local laws require that each Forex broker be licensed by a Swiss bank, which involves high costs and does not necessarily release the full spectrum of possibilities.