The Reserve
Bank of India’s warning list has just added another popular FX/CFD broker, ThinkMarkets and two prop firms, FundedNext and Smart Prop Trader. While these are
the first prop trading entities the institution has focused on, the list
already includes many well-known brokers, including eToro, IC Markets, and XTB.
Reserve Bank of India
Updates Alert List: Adds Prop Firms and FX/CFD Broker
India’s
central bank updated its warning list yesterday (Tuesday), adding several new
entities. Among FX/CFD brokers, the popular brand ThinkMarkets was added,
along with prop firms, for the first time since the registry’s creation. These
are the sector’s popular names FundedNext and Smart Prop Trader.
How can a
company end up on the Indian central bank’s warning list? As the institution
explains, it contains names of entities “which are neither authorized to
deal in forex under the Foreign Exchange Management Act, 1999 (FEMA) nor authorized
to operate electronic trading platform (ETP) for forex transactions under the
Electronic Trading Platforms (Reserve Bank) Directions, 2018.”
The Government of India, rwcently updated its Alert List of Forex Entities, and for the first time we see additional two prop firms in the list.1. @SmartPropTrader &2. @FundedNext Also a well known broker, @ThinkMarkets_EN was added.https://t.co/FpitaRwnN0What are your… pic.twitter.com/6b8wB0bhuV
— TheTrustedProp (@TheTrustedProp) October 22, 2024
The list
may also include companies that promote unauthorized access to the FX market or
claim to provide advisory and training services for individual investors in
trading.
Interestingly,
companies on the Indian regulator’s warning list often don’t even offer their
services in this country. In 2022, many popular names were added to the very same warning website. Finance
Magnates spoke with representatives of several different brokers who stated
they don’t even operate in that market. Among them were XTB and eToro.
eToro
confirmed that it “does not onboard clients from India,” and XTB
stated that it “is not operating in India and does not offer services to
residents of India.”
Indian FX/CFD Market
India
neither regulates nor directly prohibits retail over-the-counter (OTC) markets.
This allows many forex and CFD brokers to target Indian citizens. However,
clients violate local forex law, FEMA, by accepting deposits on these locally
unauthorized platforms.
Broker
OctaFX also had problems with the Indian central bank, which seized nearly $10
million from allegedly earned almost $120 million in local operations.
Nevertheless,
the industry continues to attract new entities. Last month, Axi, an
Australia-based forex and CFD broker, expanded its physical presence by opening
a new office in Bangalore, India. Although confirmed today (Monday), the Indian
office was inaugurated “several weeks ago.” The new office is led by
Axi’s head of engineering in the region and employs about 30 staff with plans
for further expansion in “coming months.”
This article was written by Damian Chmiel at www.financemagnates.com.
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