21 November, 2017 | AtoZ Forex - Several websites of non-Chinese retail FX brokerages have been blocked to prevent users in mainland China from accessing proscribed websites. In fact, any kind of trading activities in the financial market such as Forex, commodities, futures, and indices are illegal without the approval of Chinese officials. How do Forex brokers deal with this issue?
China blocks foreign retail Forex broker websites
According to some online reports, among those affected are FXCM, XM, Aetos, and FxPro. The report from the National Internet Finance Association of China (NIFA) states that all activities including media and payment solutions should host inside China and carry a Chinese Internet license.
In an attempt to keep ‘foreign influence’ out of China, the government is simply blocking websites. Also, Chinese authorities are deleting content and de-indexing items from search engines, hence large companies simply disappear.
In October, China’s Ministry of Industry and Information worked alongside the financial risk assessment agency. The National Internet Finance Security Technology Expert Committee issued a report on several prominent risks of Internet foreign exchange finance platforms.
This means that there will be a greater dependence on introducing brokers (IBs), which may accept as the only means by which western firms interact with a Chinese audience. Moreover, very few Chinese investors trade their own accounts to the Chinese language site of a foreign broker and invest directly.
What are the industry players' perspective?
To get a clearer picture of the Chinese market situation, we have spoken to a number of brokers that target investors in China. Firms have decided to stay anonymous due to the sensitivity of the matter. As a matter of fact, in spite of the operational difficulties, brokerages continue their usual business routines.
Some of the companies stated that such scenario in the Chinese market is not a surprise, and their businesses are not financially affected in any way. One of such remarks revealed that industry players usually find a way to continue operations. Some of the firms alter their websites' URL to go around the ban, which helps them stay on the track.
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