Do not invest more money than you can afford to lose.
XTB, a European forex broker regulated by UK’s Financial Conduct Authority (FCA) and Poland’s financial supervision commission (KNF), announced it is exiting the Turkish market.
XTB was one of the several major European forex brokers present in Turkey, besides Saxo Bank and Phillip Capital and around 40 local brokerages.
The most likely reason for XTB’s exit are the recent severe limitations imposed by Turkey’s Capital Markets Board (SPK). This February, somewhat unexpectedly, the watchdog capped the max leverage offered to retail clients to 1:10 and set the minimum required sum to open a forex trading account is TRY 50 000 (around $13 600), or their equivalent in another currency. Previously the max leverage in Turkey was 1:100 for clients with at least TRY 20 000 (around $5440). For those with less funds, the leverage cap was set at 1:50.
The restrictions prompted expectations that this would drive many of the local forex brokerages out of business, as a large number of smaller retail clients would not be able to cover the new deposit requirement.
On the other hand, XTB’s newly appointed new CEO Omar Arnaout had told the site Finance Magnates last month that despite the restrictions in Turkey, the company has no plans of shuttering its business there. “At this moment, unlike many other brokers operating in Turkey, we plan to maintain our branch”, Arnaout told Finance Magnates. “We are aware, however, that the current state of the CFD market may change dramatically. Due to the leverage reduction to 1:10 and the increase in minimum deposits to around $13,500, the customer profile will change from standard retail investors to significantly larger ones.”
XTB was founded in 2002 and is now established in more than 15 countries in Europe, South America and Asia. It is the leading forex broker in Central and Eastern Europe. It went public on the Warsaw Exchange last spring.
The broker provides online trading in over 1500 instruments, including forex, indices, shares, commodities and ETFs. It offers three types of live trading accounts and does not require a minimum deposit. Trading can be done on two platforms – the MetaTrader 4 and the broker’s proprietary xStation. The broker’s various subsidiaries are regulated by UK’s Financial Conduct Authority (FCA) and Poland’s financial supervision commission (KNF).
Recently the broker reported a drop in the net profit for Q1 2017 and plans to expand in Latin America.
