I have been told that because of EU regulations I cannot use some services brokers offer. This is the case of the IC Markets app IC Social (a copy and signal provider app).
I would like to know the reason WHY the EU rules do not allow it. What is that reason? I have a IC Markets SC account (the Republic of Seychelles), not an EU account (despite the fact I am an EU resident). And I have therefor 1:500 leverage, which is also not allowed under EU rules.
It’s not illegal as an EU citizen to use an unregulated broker or service, so why is this an issue? I understand it’s all about reducing risks for customers, but nothing prevents me from using services which do not comply with EU rules.
Am I right or am I missing something?
I am lost because I can't download the IC Social app on Google Play (which is, I guess, because of Regulation policies). However I CAN install the Signal Start app from Myfxbook, so I am wondering what the difference is....
Hi Forexman! Regulation can be a maze to navigate, so let me shed some light on your questions.
The restrictions on certain broker services, like the IC Markets app IC Social, are indeed related to EU regulations, specifically MiFID II (Markets in Financial Instruments Directive II). Here's the lowdown on why these restrictions exist:
Investor Protection: EU regulations aim to enhance investor protection and ensure fair and transparent trading practices. They impose certain requirements on brokers and service providers to safeguard client funds, provide appropriate risk warnings, and ensure suitability of products and services for clients. This includes restrictions on leverage, which you mentioned.
Compliance and Licensing: Brokers and service providers must obtain regulatory licenses to offer their services within the EU. These licenses come with specific obligations, such as complying with capital adequacy requirements, adhering to certain business conduct standards, and implementing robust risk management frameworks. If a broker or service doesn't meet these requirements, it may not be able to offer its services to EU residents.
Cross-Border Regulations: Even if you have an IC Markets SC account (Republic of Seychelles), as an EU resident, you may still fall under the scope of EU regulations. Cross-border regulations are in place to ensure that EU residents are protected when engaging with financial services providers, even if they're based outside the EU.
While it's true that it's not illegal for EU citizens to use unregulated brokers or services, it's important to understand the potential risks involved. Without the regulatory oversight provided by EU regulations, you may have limited recourse in case of disputes, fraud, or other issues.
Regarding the availability of certain apps, it's possible that Google Play Store restricts the availability of certain trading apps that may not comply with EU regulations. This might explain why you can install the Signal Start app from Myfxbook but not the IC Social app.
Ultimately, it's crucial to consider the potential risks and benefits when choosing a broker or service provider. Conduct thorough research, understand the regulatory landscape, and ensure you're comfortable with the level of protection and compliance offered by the chosen provider.
Remember, regulation is there to protect traders, but it's also important to exercise personal due diligence and make informed decisions.
Wishing you success in your trading journey, and may your path be regulated and well-aligned with your goals!
@ForexTradingStor you explained it very well... thank you. Too much words, but I read them all.
The only thing I would like to add or note. It is that your entire explanation takes place under the law.
But it does not take into account simply that the EU regulations put so many restrictions on their citizens also because they do not want competition. So, in order to work with European clients, brokers need to get EU regulation and, as the author of the thread said above, be content with less leverage for traders.
Simple math, more brokers get their regulation, more money goes to them rather than third party regulators.
Previously, there were several regulators, now there are many more of them and competition for a client has grown, and since they cannot force brokers to buy their license, they begin to restrict their citizens at the legislative level. Here is another reason for these bans. And it will only get worse.
Despite all types of protection of the rights of customers and citizens, it is still a competitive market and the rules of competition also exist there.
In the case of the IC Markets app IC Social, which you mentioned, it's possible that it doesn't comply with the regulatory requirements imposed by MiFID II. This could be the reason why you are unable to download it from Google Play or use it within the EU. The app may lack the necessary licenses or fail to meet the criteria outlined in MiFID II, making it non-compliant with EU regulations.
Regarding the difference between the IC Social app and the Signal Start app from Myfxbook, it's important to note that regulatory compliance can vary among different apps and service providers. While Signal Start may have met the requirements and obtained the necessary licenses to operate within the EU, IC Social may not have done so.
คำเตือนความเสี่ยงสูง: การแลกเปลี่ยนเงินตราต่างประเทศมีความเสี่ยงสูง ซึ่งอาจไม่เหมาะสำหรับนักลงทุนทุกราย
เลเวอเรจสร้างการเผชิญกับความเสี่ยงและการขาดทุนเพิ่มเติม ก่อนที่คุณจะตัดสินใจเทรดการแลกเปลี่ยนเงินตราต่างประเทศ ให้พิจารณาวัตถุประสงค์การลงทุน ระดับประสบการณ์ และการยอมรับความเสี่ยงอย่างรอบคอบ
คุณอาจสูญเสียเงินลงทุนเริ่มต้นบางส่วนหรือทั้งหมด อย่าลงทุนเงินที่คุณไม่สามารถสูญเสียได้ Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
มีการให้ข้อมูลและข้อมูลใด ๆ 'ตามสภาพ' เพื่อวัตถุประสงค์ในการให้ข้อมูลเท่านั้น และไม่ได้มีวัตถุประสงค์เพื่อการเทรดหรือคำแนะนำ