​Vanuatu to Require Physical Presence of Brokers, Effective from October 16

Fazzaco learned that the Vanuatu Financial Services Commission (VFSC) is mandating offshore brokers to have a local physical office in this jurisdiction; those failing this rule might have their license revoked by the VFSC otherwise. The new regulation will come into effect from October 16.

Further, offshore brokers are required to appoint a local manager and director.

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The new regulations did not come abruptly. Back in March 2021, the watchdog has officially passed their proposed physical presence requirement for all licensed forex brokers into law. So far, only four forex and CFDs brokers are satisfying the new regulations, namely FXPrimus, Titan FX, TradeNext, and MFM Securities.

Vanuatu was one of the major jurisdictions favored by offshore brokers due to its loose regulations. Currently, however, the increasingly tightening regulations and increased cost of maintaining a Vanuatu license are cooling offshore brokers' ardor to head for this destination.

"Our regulator wants to attract only the most serious applicants. If they are genuine in their intentions and dedicated in their approach, and they intend to properly run their business in Vanuatu, the VFSC will be flexible and patient," said Martin St-Hilaire, Chairman of the Financial Markets Association of Vanuatu.

"Our country wants to bring about a sea change in the way it does business, by transitioning from an offshore, protected financial center to an onshore, transparent Fintech center."