The world of foreign exchange (FX) and contract for difference (CFD) trading has been turned upside down. Now other countries are quickly following suit, dropping strict rules. Included, the United States, Australia, and Singapore have all passed such restrictions. These recently adopted rules dramatically affect how residents engage with financial instruments.
To preemptively address consumer investor protection concerns, the United States has implemented regulations prohibiting FX and CFD trading to its citizens. Additionally, local laws and regulations prevent individuals from engaging in such trading activities, thus restricting access to these markets altogether. Firms providing FX and CFD services have removed all doubt. Yet, they recently declared that international versions of their platforms are exempt from serving U.S. residents.
In much the same manner, Australia passed its own set of prohibitions with regard to FX and CFD trading. Yet, the country is opened to trading—and not just for “wholesale clients” with high eligibility requirements. These criteria generally force clients to have a certain level of assets or significant history with trading. Consequently, very few of our clients are legally allowed to participate in these markets.
Notably, Singapore has high barriers to entry for FX and CFD trading as well. Local laws prohibit the vast majority of residents from utilizing these services. Consequently, trading options in the Asia-Pacific region are significantly reduced.
For businesses that work in these markets, the news couldn’t be bigger. Websites that define positions in the FX and CFD space have established their stances. Utilities that do not serve residents of the United States or of Singapore. The same is true in Australia — except for those defined as “permitted clients,” who are able to clear the higher barriers.
These regulations are changing to offer more protection for retail investors. They signal a positive trend on the part of governments to protect citizens from the inherent risks of FX and CFD trading. This change will drive companies to rethink how they bundle their products and direct their marketing efforts.
The website distinctly explains that it is not directed at residents of the United States, Australia (to any extent), or Singapore. This limitation helps guarantee adherence to local rules. This approach supports existing regulatory requirements, clearly showcasing a commitment to compliance in these growing jurisdictions.
“information” – LMAX Group