Exclusive: ASIC Product Intervention Order Forces EightCap to Shut Business Outside Australia

Fazzaco Exclusive... Fazzaco has learned that EightCap Pty Ltd, the global Forex and CFD broker branded as EightCap and regulated by the Australian Securities and Investment Commission (ASIC), has notified that it will stop taking clients from outside Australia due to the impact of ASIC's product intervention order on its business.

"Please kindly be informed that EightCap will no longer accept clients from outside Australia due to the impact of ASIC's product intervention order effective 23 October 2020," the Australian brokerage stated. "To ensure continuity of your trading experience on our platform, we have enabled EightCap Global Ltd (Vanuatu) to offer services to non-Australian clients."

EightCap Global Ltd (Vanuatu) is another entity that operates under the brand EightCap. It is authorized and regulated by the Vanuatu Financial Services Commission (VFSC).

In its notification, EightCap Pty Ltd said the existing international clients can choose to:

· transfer their accounts and open orders to EightCap Global Ltd (Vanuatu); or

· close their accounts and open orders (Following the close, relevant clients will no longer be able to trade on EightCap).

EightCap Pty Ltd stressed that clients from countries other than Australia must make their choice before 29 January 2021. After the date, the accounts and open orders would be transferred automatically to the offshore entity. For certain clients who decides not to transfer to offshore, EightCap Pty Ltd would offer assistance to close their accounts and orders prior to 25 March 2021.

Regulatory pressure is driving ASIC brokers to offshore jurisdictions

ASIC has set up a set of strict rules to its regulated brokers since the middle of 2019. As a result, an army of ASIC brokers, specifically those targeting Asian traders including Rakuten Securities, Oanda, IG, and ETO Markets, etc., were forced to shut business in Asia, especially China, and migrate into offshore jurisdictions, such as Vanuatu, Belize, Bermuda, Bahamas, and Cayman for a looser regulatory environment.

Obtaining offshore licenses and migrating non-Australian clients into offshore regulated entities are the most popular move occurring recently among ASIC brokers, especially after the product intervention order.