Brexit is the topic that is mostly discussed and never dies, it is been all over the headlines over the past few days. British prime minister Boris Johnson lead country towards a ‘no-deal’ and globalists are trying to prevent it from happening.
Anyways, it does not really matter if you are Brexit supporter or not, because it caused some trouble for brokers and they have to cough up large sums of cash. Companies have published their comment on these events happening that the real money spent, employees hired and man hours that were put in costing them hundreds of thousands of dollars. Apparently, companies had to hire more compliance and office people and figure out other alternative payment solutions. It would not have happened if there was soft Brexit and now they are all lost in the situation as no one really knows if it will hit them or not.
Nevertheless, there are of course some people who are quite optimistic about this topic and is ‘no big deal for them’.Some markets do not really get upset about the occurring events and say that they only had to upgrade just one or two offices to fully upgrade it to full European status. Might be happening some changes but as minimalistic as possible.
Firms such as CMC really do not have much problem with getting additional licensing and hiring several new people, but realistically it will cost some amount and management team will not be thrilled with it. Now, let’s compare it to small companies for them spending a few hundred grand will for sure cause a problematic situation and they will end up losing quite a big amount of money.
As for the brokers who choose to stay in the UK without European licensing will cause severe problems when it comes to advertising because having no EU license would not make it easier to market their services to customers. However, most of them do not even concern themselves that much about the agreement. Thus, unsurprisingly many UK firms might be picking up some new clients across the EU.
It was also announced by CEO of one brokerage company that brokers will not be allowed to advertise in the EU if the UK leaves the European Union without a deal.
Big impact on British businesses
Much of the focus when talking about the Brexit is probably the impact it might have on British businesses and economy. But considering the fact that its the retail trading industry, other firms in Europe will be adversely affected.
A consultant and the former CEO of UK based CTP Markets said that in the end with or without a deal, there will come up a situation at certain point when all CFD firms will cease to exist. Many brokers who are not authorised by the FCA, are taking advantage of the system and using this fact as a major selling point, but over time those firms will lose the ability and competitive edge that they have had over the UK.
Those firms have to pass their European clients on to their FCA– regulated entity and if they are unable to make it happen they will be obliged to move them to relevant countries which they fear the most. Getting a new license in a new country could be a very complex process.
It is currently unpredictable how Brexit will end but some facts are quite obvious retail trading industry has already felt changes and impact is felt. It is very likely that companies will spend millions to ensure providing services to European clients after the UK leaves the EU. As for the fact, the hurricane might be coming and it will not come cheap.