Offshore zones are often, if not always, associated with loose regulation and being a congregation place for unreliable bucketshops. The Bahamas financial regulator, the Securities Commission of The Bahamas, seems determined to avert this unfortunate (and usually very justified) reputation when it comes to the brokers registered there. A number of new regulations have been implementing with the purpose of attracting serious brokerage firms to get a local license:
- Leverage will be capped at 1:200, except for cryptos. Leverage for different cryptocurrencies will be judged case by case;
- Binary options for retail clients are banned;
- Cold-calling and other similar aggressive marketing tactics are banned;
- Bonuses and other incentives of the sort are also banned;
- They are implementing a negative balance protection requirement;
- There will be more reporting on CFD transactions;
- Brokers need to have risk warnings;
Source
Those seem like reasonable changes and I am really glad they’re implementing them, because offshore zones have been a great congregating place for all sorts of scammers. I wish they had added a compensation scheme like the FCA has too.
All that said, I’d still prefer a broker with a non-offshore zone license.