We recently covered the fact that eToro had acquired a FCA licence, now it’s the turn of Estonian Admiral Markets who have been granted an FCA regulatory licence. This quite an interesting move by Admiral Markets who already have the ability to operate throughout the European in virtue of MiFID, however Admiral Markets has made the decision to open a UK based entity named Admiral Markets UK Ltd. This new FCA regulated entity will mainly cater to clients in Britain and Western Europe, in the hopes of achieving significant expansion into these lucrative territories. Admiral Markets representatives stated that achieving FCA regulation was the next logical step after the company took the necessary steps to become regulated by Australia’s ASIC.
The FCA recently took over responsibility from the FSA and is seen by many in the world of retail Forex as being the strongest regulatory body in the European Union. This has led to a number of companies seeking dual European regulation, with FCA regulation being sought to appeal to clients in Western Europe who are often more nervous depositing with brokerages based in some of the European Union’s newer member states. While MiFID regulation ensures that all countries in the European union provide a minimum standard of financial regulation, Britain’s financial regulation goes considerably further than the minimum requirements as set out by MiFID. For instance the UK’s Investors compensation scheme protects deposits up to the amount of £70,000, far in excess of the 20,000 Euros as set out in MiFID. This has led to a number of big brands to seek British regulation as a extra stamp of approval.
Traders in Western Europe will be able to open accounts with Admiral Markets UK Ltd. from the first of July 2013. Traders who already have account with Admiral Markets AS will be able to open another account with the UK branch if they so wish. It will be interesting to see whether any other MiFID firms follow in the footsteps of Admiral Markets and eToro in seeking regulation in two different MiFID jurisdictions.