Japanese Regulator Warns Against XM.com, BinaryTilt & I Trader FX

Japanese Regulator Warns Against XM.com, BinaryTilt & I Trader FX

The Kanto Local Finance Bureau, which is one of the 11 Japanese financial regulators in charge of different provinces published an updated list of companies that are not allowed to offer strikes in Japan.

The list includes several firms, but most notably includes the Cyprus Securities and Exchange Commission (CySEC) regulated XM.com. The company seems to have been operating in the country without the appropriate license. Japanese law doesn’t allow foreign companies that are not licensed by the Japanese Financial Services Authority (JFSA) to onboard clients from the country.

XM.com is joined by a number of unregulated brokers such as Brilliant One Forex, BinaryTilt, Future Make FX, Galaxy Markets, Gbinarys, I Trader FX, Stock Vision and TR Binary Options. All of the above are in violation with the Japanese law and residents have been advised to abstain from opening accounts with the firms.

Japan’s Lucrative Retail FX Market

The Japanese retail foreign exchange market is one of the largest in the world, prompting a number of companies to target clients in the country without proper authorization. In previous years a number of big brokerages have been asked by Japanese authorities to cease operations in the country.

Japanese retail traders are notoriously risk-prone, which prompted the JFSA to cut the maximum leverage that clients can use to 1:25. The country’s regulator has enacted the rule in the aftermath of the Global Financial Crisis of 2008, limiting access to leverage in two steps (1:50 being the first one).

After an initial slump in trading volumes, the numbers rebounded as traders got used to put up more capital per trade. The example is serving to prove that trading volumes of retail clients are not as dependent on high leverage, as many in the industry think.

Several brokerages in the EU have started reducing the maximum leverage available to clients after the regulatory authorities vowed to crack down on the use of high gearing.

Source: Finance Magnates

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