February 1, 2021 | AtoZ Markets – From February 26, 2021, ForexTime Limited, a division of the FXTM brand of renowned businessman Andrey Dashin, regulated by the CySEC, will cease serving retail investors in Europe.
Why is ForexTime Limited is Shutting Down?
The reason why forex broker FXTM decided to suspend their retail business in Europe is quite simple. The Cypriot company has sent out emails to customers informing that from that date it will provide its services in the EEA region exclusively to professional clients and institutional traders.
Many forex brokers, such as Exness, have decided to close their retail business in the EU/EEA, including the UK, in order to focus on developing the B2B segment as well as to continue expanding into other markets.
Recent changes in the regulatory environment explain brokers' desire to focus on professionals. Trading in retail forex in Ervop becomes more difficult every day, which is why many brokers are looking for new opportunities in the clearing and wholesale liquidity markets.
Retail traders no longer have the option to register an account on the FXTM European website.
ESMA’s Restrictions Impacting Retail Brokers
The ESMA restrictions have already had a bigger impact on the industry than most retail brokers expected. Although over the past 2 years, the increase in volatility has partially smoothed out the adverse consequences.
For example, the European regulator has banned any welcome bonuses or other incentives that encourage clients to trade CFD instruments. This has become a problem for many firms, which often rely on such bonuses and high leverage as a means of attracting customers.
In addition, the trend towards commission-free trading hit stock-focused trading platforms that received a significant portion of their income from brokerage commissions.
However, other brokers, such as the Polish firm XTB, said their business was in a difficult situation, but they see a unique opportunity to increase market share as the recent rules create a level playing field for competition.
A natural consequence of the introduction of ESMA rules was a wave of consolidation in the market, which allowed some platforms to increase their share in the European market.
Meanwhile, ForexTime has chosen to develop its retail business outside of Europe. The company recently received a brokerage license in Kenya. This approach proves once again that ESMA's efforts to protect retail traders simply drove brokers offshore.
The new African enterprise is part of the Exinity Group, created in 2019 by entrepreneur Andrey Dashin. The group, led by FXTM co-founder Olga Rybalkina, consists of a variety of Dashin-owned retailers including Alpari International, ForexTime (FXTM) and a new brand in Nairobi.
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