Authorities in Singapore will block access to Octa and XM, two brokers offering forex and contracts for differences (CFDs), for providing services to residents of the city-state without holding a local licence.

Access to the two platforms will be blocked from 20 June, local media Channel News Asia reported today (Friday).

“Consumers with active accounts with Octa and XM will not be able to access their websites through Internet Access Service Providers based in Singapore,” a joint news release from the police and the Monetary Authority of Singapore (MAS) stated.

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Trading Platforms Must Have a Local Licence

The Singaporean authorities highlighted that the two platforms breached the local Securities and Futures Act (SFA) by not holding a licence. Any platform offering capital markets products, including securities and leveraged forex, in the country must have a local licence.

According to the authorities, Octa offers services in the country through two entities—one said to be based in the Union of Comoros and Mauritius, and the other solely in Mauritius. Similarly, XM onboards Singaporeans under an entity incorporated in Belize.

“This prohibition extends to entities operating outside Singapore, when the entities solicit or advertise products or services targeted at Singapore persons, or if there is a substantial number of Singaporeans using a foreign entity's products or services,” the authorities added.

XM did not comment on FinanceMagnates.com request, while Octa did not respond at the time of publication.

Singapore: A Profitable Market for Retail Traders

Despite its small size, Singapore is home to wealthy traders. According to data from Investment Trends, the number of active online traders in the country fell to 248,000 in September last year, down from 264,000 a year earlier. However, around 73,000 potential investors still showed interest in CFD trading.

Read more: Why Singapore Traders Are Happier Than Ever (Even As Their Numbers Shrink!)

Meanwhile, many brokers choose to base themselves in Singapore due to its clear regulations and well-funded traders. Recently, StoneX-owned Forex.com launched CFD trading services from its new Singapore base. eToro also obtained a licence in the country for its regional operations.

Source: Finance Magnates