FNG Exclusive… The preparation for a post-Brexit world in the FX industry continues.
FNG has learned that leading Australia based Retail FX and CFDs broker Pepperstone has just received a financial services license in Germany from BaFin, the German regulator. The BaFin license is one of the harder to get within the EU, however we understand that with ambitions in the German and Austrian markets it was important for Pepperstone to be licensed directly in the country.
Pepperstone, alongside competitors AxiTrader and GO Markets dominates the domestic Australia retail FX market, and all have ambitions beyond their home market. Pepperstone recently opened a Dubai office and established a DFSA licensed entity in the UAE.
Pepperstone was founded in 2010 and has become one of the largest MetaTrader brokers worldwide. The company set up an FCA-licensed subsidiary in the UK, Pepperstone Limited, in 2015. That entity has been passported into the EU since 2015. However with the Brexit transition phase coming to a close in just a few months at the end of 2020, EU-UK license passporting will no longer be available to FX brokers and other financial institutions. In preparation for Brexit, we have seen a number of FCA-licensed brokers look to establish separate licensed subsidiaries in EU countries, in order to keep on transacting business with continental European clients post 2020.
In the FX world many brokers are choosing to set up in Cyprus as an EU base – Cyprus is home to more Retail FX brokers than any other country. We understand that in addition to Germany, Pepperstone is also making preparations to set up a subsidiary in Cyprus and receive a CySEC CIF license. However those preparations are not as far as long as in Germany.
FNG spoke with Pepperstone CEO Tamas Szabo, who had the following to say on the matter:
“This is a significant milestone for Pepperstone. Expanding our global reach has been an important focus for us in recent years. Widening our reach in Europe was a natural step for us in this journey. Securing the BaFin license further solidifies our commitment to expanding our offering for German and Austrian clients.”