Authorities in Singapore will block access to Octa and XM, two brokers offering forex and contracts for differences (CFDs), for providing services to residents of the city-state without holding a local licence.
Access to the two platforms will be blocked from 20 June, local media Channel News Asia reported today (Friday).
Consumers with active accounts with Octa and XM will not be able to access their websites through Internet Access Service Providers based in Singapore, a joint news release from the police and the Monetary Authority of Singapore (MAS) stated.
You may also like: XM Owner Is Buying Controlling Stake in a Cyprus Bank
Trading Platforms Must Have a Local Licence
The Singaporean authorities highlighted that the two platforms breached the local Securities and Futures Act (SFA) by not holding a licence. Any platform offering capital markets products, including securities and leveraged forex, in the country must have a local licence.
According to the authorities, Octa offers services in the country through two entitiesone said to be based in the Union of Comoros and Mauritius, and the other solely in Mauritius. Similarly, XM onboards Singaporeans under an entity incorporated in Belize.
This prohibition extends to entities operating outside Singapore, when the entities solicit or advertise products or services targeted at Singapore persons, or if there is a substantial number of Singaporeans using a foreign entity's products or services, the authorities added.
Reacting to the actions of Singapore authorities, an XM representative told FinanceMagnates.com : XM is a globally trusted and regulated broker, serving millions of clients across more than 190 countries. We put our clients first and ensure uninterrupted access to our services.
Our website does not contain information specifically directed at persons residing in Singapore, and the company has no physical presence or servers in the country, the representative added. Since its establishment, XM has maintained a strong track record of cooperation with regulatory authorities.
Commenting on the matter to FinanceMagnates.com, Octa said: "Firstly, we are fully aware of the regulatory requirements and are already taking all the necessary steps to meet them. With that goal in mind, we are currently working towards establishing a compliant presence in the regions where our platform is available. We are also in ongoing communication with regulators, legal advisors, and relevant parties to ensure alignment with local legislation. As a regulated global broker, Octa follows international policies that serve to protect clients' funds and prevent malicious activities. In the present situation, we prioritise the security of our Singaporean clients' funds and stay on top of our financial responsibilities."
Singapore: A Profitable Market for Retail Traders
Despite its small size, Singapore is home to wealthy traders. According to data from Investment Trends, the number of active online traders in the country fell to 248,000 in September last year, down from 264,000 a year earlier. However, around 73,000 potential investors still showed interest in CFD trading.
Read more: Why Singapore Traders Are Happier Than Ever (Even As Their Numbers Shrink!)
Meanwhile, many brokers choose to base themselves in Singapore due to its clear regulations and well-funded traders. Recently, StoneX-owned Forex.com launched CFD trading services from its new Singapore base. eToro also obtained a license in the country for its regional operations.
Authorities in Singapore will block access to Octa and XM, two brokers offering forex and contracts for differences (CFDs), for providing services to residents of the city-state without holding a local licence.
Access to the two platforms will be blocked from 20 June, local media Channel News Asia reported today (Friday).
Consumers with active accounts with Octa and XM will not be able to access their websites through Internet Access Service Providers based in Singapore, a joint news release from the police and the Monetary Authority of Singapore (MAS) stated.
You may also like: XM Owner Is Buying Controlling Stake in a Cyprus Bank
Trading Platforms Must Have a Local Licence
The Singaporean authorities highlighted that the two platforms breached the local Securities and Futures Act (SFA) by not holding a licence. Any platform offering capital markets products, including securities and leveraged forex, in the country must have a local licence.
According to the authorities, Octa offers services in the country through two entitiesone said to be based in the Union of Comoros and Mauritius, and the other solely in Mauritius. Similarly, XM onboards Singaporeans under an entity incorporated in Belize.
This prohibition extends to entities operating outside Singapore, when the entities solicit or advertise products or services targeted at Singapore persons, or if there is a substantial number of Singaporeans using a foreign entity's products or services, the authorities added.
Reacting to the actions of Singapore authorities, an XM representative told FinanceMagnates.com : XM is a globally trusted and regulated broker, serving millions of clients across more than 190 countries. We put our clients first and ensure uninterrupted access to our services.
Our website does not contain information specifically directed at persons residing in Singapore, and the company has no physical presence or servers in the country, the representative added. Since its establishment, XM has maintained a strong track record of cooperation with regulatory authorities.
Commenting on the matter to FinanceMagnates.com, Octa said: "Firstly, we are fully aware of the regulatory requirements and are already taking all the necessary steps to meet them. With that goal in mind, we are currently working towards establishing a compliant presence in the regions where our platform is available. We are also in ongoing communication with regulators, legal advisors, and relevant parties to ensure alignment with local legislation. As a regulated global broker, Octa follows international policies that serve to protect clients' funds and prevent malicious activities. In the present situation, we prioritise the security of our Singaporean clients' funds and stay on top of our financial responsibilities."
Singapore: A Profitable Market for Retail Traders
Despite its small size, Singapore is home to wealthy traders. According to data from Investment Trends, the number of active online traders in the country fell to 248,000 in September last year, down from 264,000 a year earlier. However, around 73,000 potential investors still showed interest in CFD trading.
Read more: Why Singapore Traders Are Happier Than Ever (Even As Their Numbers Shrink!)
Meanwhile, many brokers choose to base themselves in Singapore due to its clear regulations and well-funded traders. Recently, StoneX-owned Forex.com launched CFD trading services from its new Singapore base. eToro also obtained a license in the country for its regional operations.
