Which Offshore Regulator Is More Powerful?

The majority of forex brokers have turned to offshore regulation in search of looser jurisdictions to reduce their operating costs since European regulators tightened their policies on the forex industry in 2018.

At present, forex licenses issued by the Securities Commission of the Bahamas (SCB) and the Cayman Islands Monetary Authority (CIMA) are well-known for their highest quality and popularity. Incorporated into qualifications, offshore regulatory permits should not be taken as a ground to repudiate a regulated broker but evidence to beef up its reputation.

An official of the European Securities and Markets Authority (ESMA) noted that an SCB license has been accepted by the majority of European forex brokers since they saw restrictions on leverage, trade terms, and advertising.

“The Securities Commission of the Bahamas seems to be positioning the jurisdiction in a ‘Goldielocks zone,’” commented Jim Manczak, Director of Bahamas Offshore Services, “A set of rules more sensible than in the EU, but not as loose as most offshore jurisdictions.” The Bahamas have become one of the offshore jurisdictions that get the worlds attention.

However, some forex brokers may leave for other jurisdictions that are more friendly for trading such as the British Virgin Islands (BVI) and Seychelles because of the growth of regulation fees and the tightening of rules and regulations in the Bahamas.

In any case, regulations implemented by the Bahamas are impressive, which can help this offshore jurisdiction stand out from others and fuel its popularity.

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