UTIP specialists: acceptance in countries with strict jurisdictions

Brokerage activity in over-the-counter (OTC) markets depends on the country and its connection to payment solutions. Domestic legislation, geopolitical situation and cultural background — all these factors can affect brokerage terms and conditions. According to legal requirements, countries can be divided into three groups, the UTIP Technologies Ltd. experts say.

Group №1

Countries: some Southeast Asian and African states, along with CIS and Latin America.

The countries mentioned above provide a great selection of service suppliers and payment methods. Standard bank acquiring is not common here. In most cases, there are alternative options, such as p2p, local payment systems, or online banking. All of these methods are aimed at cutting broker’s expenses, while maintaining a high percentage of payment conversion.

Group №2

Countries: Europe and the Gulf Cooperation Council (GCC).

The second group has stricter regulatory and documentary requirements. Brokers dealing with traders from these regions need to comply with the existing rules and obtain multiple licenses and certificates for their activities. This may have a negative impact on their financial viability. But there is one way to receive payments from Europe: open a bank account for a newly established company, or create a payment gateway on your own.

Group №3

Countries: Japan, Canada, Australia, Israel and the US

Regulatory requirements in these countries are as stringent as possible. Brokers interested in clients over there are obliged to meet high standards and receive special licenses. Violation of the rules entails serious financial and legal liability. Most market players recommend to avoid cooperation with the third group of countries in order to prevent negative consequences for a broker, even despite him being a legal entity. Compliance agents within these jurisdictions can be extremely persistent in shutting down and blocking Forex dealers.

Some countries also present leverage limitations, thus putting bounds to the trader’s flexibility and broker’s profitability.

Overall, finding the best jurisdiction and connecting payment solutions are major hurdles to run the brokerage in the OTC market. Each region has different requirements and restrictions that can affect both business conditions and market players’ effectiveness. The list of mandatory documents varies from partner to partner. Some affiliates are ready to cooperate without a registered legal entity, while others require a license. Most companies are open for partnership only if they have a full-fledged legal component.

The UTIP Technologies Ltd. Experts would be pleased to assist you in payment system selection by taking into account individual Forex broker’s circumstances in the first and second groups of countries.