Exclusive: FXCM gets CySEC license, FOREX.com applying
FNG Exclusive… The race to prepare for Brexit continues.
FNG has learned that Retail FX and CFDs brokerage group FXCM has established a beachhead in Cyprus ahead of the end of Brexit’s transitional phase at year-end 2020. The company actually set up FXCM EU Ltd in the EU island nation in late 2019, and spent the better part of 2020 in an application process for a CIF license from Cypriot regulator CySEC. Even for established brokers such as FXCM (and FOREX.com, see more on that below), the CySEC licensing process is a thorough and lengthy one.
FXCM formally received its CySEC CIF license on November 23 (license number 392/20).
The company has also set up a number of EU client destination websites, namely fxcm.com/eu, fxcm.com/fr, fxcm.com/it, fxcm.com/gr, and fxcm.com/es.
For now the Cyprus operation is being run by London based FXCM UK COO Juan Miguel Cafe. However we understand that the company plans some senior personnel additions as the entity starts full operation in earnest early next year.
FXCM’s longtime US rival FOREX.com, now owned by StoneX, is also in process of applying for a CySEC license. In StoneX’s latest 10-K disclosure it stated that the CIF “license application is currently under consideration by the Cyprus Securities and Exchange Commission.”
As of the beginning of 2021, UK licensed firms will no longer be able to passport their FCA license into EU member countries to serve clients in those countries (and vice versa), requiring FX brokers such as FXCM and FOREX.com to have licensed subsidiaries both in the UK to serve UK clients, and in at least one EU country from where that license can be passported to all other EU nations. Cyprus has been the EU country-of-choice for many if not most Retail FX firms, having a multitude of brokers already on the island with a robust infrastructure and personnel available to work in the Retail FX sector.
FXCM is controlled by US investment bank Jefferies Financial. Other than Cyprus, the company has licensed subsidiaries in the UK, Australia, and South Africa.