PBoC warns about illegal Forex brokers in China, adding that it intends to take measures in order to shut down the illegal Forex brokerage activities that are targeting retail Forex traders in the country.
21 September, AtoZ Markets – The People’s Bank of China (PBoC), the central banking authority in China, has reportedly posted a notice on its website that addresses retail Forex brokerages operating in the country.
PBoC Warns About Illegal Forex Brokers in China
According to the announcement, the PBoC warns industry participants that is intends to take measures in order to shut down the illegal Forex brokerage activities that are targeting retail Forex traders in the country.
The notice initially emerges from the Ministry of Public Security and financial regulator State Administration of Foreign Exchange (SAFE). It states that Chinese authorities did not issue any approvals for institutions to carry out or serve as a foreign exchange deposit business. This is the PBoC’s term for leveraged Forex trading services.
The bank of China also stated that it is regarded as an illegal act for any unauthorized institution to carry out foreign exchange deposit trading without any authorization. It is also an offense for an entity of an individual to delegate an unapproved institution to carry out foreign exchange deposit transactions. This is applicable for both foreign currency and RMB as a security deposit.
China’s Clampdown on illegal Forex Brokers
The notice from Chinese authorities comes as the first made since similar caution notes were made at beginning of the current year against foreign-based Forex brokers onboarding Chinese clients. In addition, earlier last November, AtoZ Markets reported that several websites of non-Chinese retail FX brokerages have been blocked to prevent users in mainland China from accessing the 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 was simply blocking websites. Also, Chinese authorities are deleting content and de-indexing items from search engines, hence large companies simply disappear.
In October 2017, 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.
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