Assuming I’m dealing with a FX broker or Stockbroker or bank that has multi regulations. Like: CySEC, European regulators (ex: BaFin - Germany, FCA - United Kingdom, ACP - France). Assuming I want to be under BaFin regulation as e.g. I like their customer service or whatever. How shall I enter in the contract or open account with that Broker or ANY broker that if conflict raise, BaFin-Germany would solve my case and not CySEC-Cyprus, while the broker is multi-regulated?
Please don’t write unprofessional things like, ‘because you are British and living in the country X, FCA applies to you.’ As this is not the answer. Thanks.
It’s a pleasure for me that you find my question interesting. I have some assumptions but I don’t know what the law says in this matter. Because this is a dispute between you and broker, in case it happens, probably FCA, if you have time to call them, can have the answer?
If you are free, I asked one more question you may want to give your professional answer to it:
I’ve not contacted my broker as yet given that it’s a weekend.
However: I think I may have the answer (this just based on experience from some years ago when I REGISTERED the broker that I was working for at the time with our financial authorities) (only occurred to me this morning when I saw your reply). I don’t think it’s possible to be REGULATED by two different REGULATORY bodies. There is a difference between REGISTERED and REGULATED. A broker that is REGULATED must be REGULATED by the REGULATOR of the country in which they are located and it is that REGULATORY authority that one would approach in the case of a dispute or REGULATORY issue. A broker can however be REGISTERED in multiple countries. If memory serves me correctly there are possible variations to this when it comes to EU PASSPORTED countries (but I cannot remember the finer details).
I will take a look at your other thread and comment if I have something valuable to contribute.
I will indeed check on the regulatory issue with my broker tomorrow for the sake of interest though and will post details (just in case I’m wrong on the above).
There are brokers that have an office in multiple countries. They have regulation in each country that they are registered. I give you an example of a broker:
‘JFD is a leading Group of Companies offering financial and investment services and activities. “JFD Bank” is a brand name and registered trademark owned and used by the JFD Group of Companies, which includes: JFD Group Ltd (ex. JFD Brokers Ltd), a company with registration number HE 282265, authorized and regulated by the Cyprus Securities and Exchange Commission - CySEC (Licence number: 150/11), JFD Overseas Ltd which is authorized and regulated by the Vanuatu Financial Services Commission (License number 17933) and JFD Bank AG which is authorized and regulated by the Federal Financial Supervisory Authority (BaFin) and by the Deutsche Bundesbank under license number 120056.’
Again the broker has written:
‘Regional restrictions: JFD Group Ltd is allowed to serve only clients whose residence is in the EEA or in a country where the company has a legal permission to do so (such as Belarus, China, Switzerland, Turkey, UAE and Ukraine) whereas JFD Overseas Ltd is allowed to serve only clients whose residence is in another third country. A restriction on offering investment services applies to residents of the United States of America, Russia and to residents of other countries whose domestic regulations classify such investment offering as prohibited.’
The question is, I’m living in Cayman for a year. Can I open an account that is under ‘JFD Bank AG’ that is under BaFin Regulatory? As I don’t want to be under CySEC regulation or anything else.
At just looking at your post: you’ll notice that in each different country there are different companies (juristic persons) registered in those countries even although they’re part of a group. In other words: with their setup it’s possible for them (each separate legal entity) to be be both registered and regulated in the countries in which the individual and separate business entities or companies are registered regardless of the fact they they belong to a group of companies.
But I cannot answer your last question though. I will ask my broker but I don’t think they’re going to be able to answer your question directly either. I know you don’t want to hear this but I think that only the broker that you’re looking at could answer that question. What I CAN tell you is that the country in which YOU reside has nothing to do with things (this you mentioned in your very first post). In other words: it’s irrelevant that I don’t live in the UK which is where my broker is registered and regulated. Even although they may be registered in my country: it is the UK’s regulatory authority that I would have to approach in the case of a dispute and not the regulatory authority in my country as they’re not regulated by the authority in my country. Hope that makes sense.
But as I say: I shall check this out (just to make sure I’m not talking nonsense above) (which is always possible let’s face it!!! LOL!!!).
But for what it’s worth and having some experience with some of this stuff: I personally would look for a broker that is registered and regulated in either the US or the UK if that’s an option. You know: a lot of people will go for brokers where these new margin requirements are not applicable and they can trade with 1 000 000:1 leverage (you now what I mean). I honestly and truly believe that these new margin requirements and restrictions imposed on retail traders are the best thing to ever happen to this industry and trying to escape those regulations and ending up with a broker that is registered and regulated by a regulatory authority that exists in name only and has no “bite” just because they want to trade with ridiculous amounts of leverage (which actually, in my opinion, means they don’t have the required capital and therefore should not be trading anyway) is not the way to go. But that’s just me (another lecture). Of course: not saying this applies to you or in your case i.e. I don’t know obviously.
In answer to your question it seems as though I was right:
A broker cannot be regulated in two different countries UNLESS they have registered entities (companies) registered in each country. And the regulator to which you would address issues would be to the regulator in the COUNTRY IN WHICH YOUR ACCOUNT WAS OPENED.
