China’s retail traders … FX brokers appear to be exploiting regulatory loopholes
Oh dear, it looks like 'interesting times' ahead for China's retail forex players … with offshore FX brokers "brazenly chasing business in a grey area of the country's online trading sector".
To set the scene:
- if deregulated, China's retail forex market would dwarf Japan to become the world's largest
- Forex margin trading is officially banned in China
Forex brokers, though, be like:
- Overseas forex brokers, … offering leverage of up to 400-times, thanks to lax enforcement.
- Brokers that own overseas licenses argue that investor money is safe, internet trading is boundless, and China has no rules banning them from doing business in the country.
Maybe its time to be worried:
- In a statement to Reuters, China's State Administration of Foreign Exchange (SAFE) reiterated that forex margin trading is illegal in China. "The Internet knows no national boundaries, but there must be national boundaries for financial licenses. Cross-border financial service providers cannot operate without a license," China's forex regulator said in the emailed statement.
While we await Asia to get a little more active, here is the link for more.