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#1 03-01-2018 13:53:02

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3091

The UK should remain within the European passport system after Brexit

The UK should remain within the European passport system after Brexit

Article by Leap rate

It looks like London’s Retail FX brokers and financial institutions can breathe easy.

At least for now.

UK financial regulator the FCA issued a statement this afternoon, indicating that it expects the UK will remain within the MiFID European passporting system after Brexit is implemented, allowing financial services companies (such as FX brokers) to receive a license in one EU jurisdiction, and passport that license fairly easily elsewhere across the EU.

For Forex brokers, passporting allows them to market and take clients from across the EU including from the lucrative UK market, while being licensed in any EU jurisdiction. Many Retail FX brokers are licensed by CySEC in Cyprus.

In the FCA’s words: "it is anticipated… that firms will be able to continue to benefit from passporting between the UK and EEA after the point of exit."

A major unknown of the Brexit process for financial institutions has been the issue of MiFID passporting. That, in the FCA’s view, seems to be a non-issue for now.

What the FCA’s statement also means is that the UK regulator is likely to adopt the final rules that pan-European regulator ESMA has proposed for the leveraged trading sector – cutting max leverage allowed to 30x on FX and CFD trading, banning Binary Options altogether, banning bonus payments to clients, and requiring negative balance protection. In order to remain part of the MiFID system the FCA will need to harmonize its rules with those of ESMA and the EU country regulators, losing some independence when it comes to issues such as setting allowed leverage levels in financial trading.

"Anything worth having is worth going for - all the way." - J.R. Ewing



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