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WHY VANUATU?

Really... Vanuatu? Isn't that like a step 'backward' from New Zealand?

Sometimes it can be difficult to understand a decision unless you can see the full picture.

Let's start with banking; as you may have seen, on the various FX-related news sites, banking, for FX companies in general, has become almost impossible. Even from the start of the FSPR, banking within NZ was non-existent for anyone listed on the registry. And over the years the FSPR registration has become somewhat of a pariah. Thus to maintain any semblance of banking, even with some reputable PSPs, a change was needed.

Then there is the simple fact that the FSPR and the FMA have several levels of contradicting regulations and like most regulatory bodies no one can provide clear guidance on anything, even when asked very specific questions. The FSPR, under the oversight of the FMA, is now just one big gray area.

Then you have the tier 1 regulators, which most people agree are the FCA, CySEC, and the ASIC, who are either no longer accepting applicants from non-multinational size participants or are in the process of pushing retail FX onto low leverage exchanges. Timing as it were is not really on our side. So as we debate as to whether the FCA will carry the torch as the most prestigious FX regulator once they get around to filing Article 50 and the Brexit begins to take shape, or if CySEC will gain the crown due to it's slightly more 'business friendly' attitude, we needed a solution.

When it comes to offshore... there are 0 options. Belize now asks for 500k when the actual regulatory environment has not gotten any cleaner, the Carribean (BVI, etc.) hasn't made any strides either over the past few years, and Labuan is just... well... scary. That left us with Vanuatu. Given the fact that the regulator wants to become THE offshore FX destination, I felt that it may give us a chance to grow with the regulation, rather than having the regulation skirt our growth. We will see. In the end, this is a step forward toward a larger eventual regulatory footprint.

FXPIG, as a company, actually WANTS some regulatory oversight. However we want something that makes sense, that protects our clients and our business, but does so from a place of experience, not speculation. This may be impossible to find but as I said GROWING with a regulator is one way to attempt to try and make it happen.

To give you an idea of the difference between the FSPR and the Vanuatu VFSC; We have already established banking relationships with the VU license, and it was decidedly MUCH easier than with the FSP listing in NZ, even after 6 years of a spotless record. The FSPR in NZ, at least when it comes to brokers not regulated by the FMA, is drawing to an end, and the FMA Derivatives License is not attractive at all given its capital requirements, but even if it was, they are no longer accepting applications from non-multinational companies.

You also need to take note that as the NZ FSPR is 'unregulated' the company's history when looking to be licensed elsewhere, is not considered, in fact, it is seen as a negative, as 'unregulated experience' is not something regulators like to see. Now a VU License might not hold the prestige a UK FCA license does, but it is, in the end, an actual license, thus it's history can be used as 'regulated experience' when applying elsewhere.

We did not take this step without absolutely 'knowing' it was the best move... for now.

Really... Vanuatu? Isn't that like a step 'backward' from New Zealand?

Sometimes it can be difficult to understand a decision unless you can see the full picture.

Let's start with banking; as you may have seen, on the various FX-related news sites, banking, for FX companies in general, has become almost impossible. Even from the start of the FSPR, banking within NZ was non-existent for anyone listed on the registry. And over the years the FSPR registration has become somewhat of a pariah. Thus to maintain any semblance of banking, even with some reputable PSPs, a change was needed.

Then there is the simple fact that the FSPR and the FMA have several levels of contradicting regulations and like most regulatory bodies no one can provide clear guidance on anything, even when asked very specific questions. The FSPR, under the oversight of the FMA, is now just one big gray area.

Then you have the tier 1 regulators, which most people agree are the FCA, CySEC, and the ASIC, who are either no longer accepting applicants from non-multinational size participants or are in the process of pushing retail FX onto low leverage exchanges. Timing as it were is not really on our side. So as we debate as to whether the FCA will carry the torch as the most prestigious FX regulator once they get around to filing Article 50 and the Brexit begins to take shape, or if CySEC will gain the crown due to it's slightly more 'business friendly' attitude, we needed a solution.

When it comes to offshore... there are 0 options. Belize now asks for 500k when the actual regulatory environment has not gotten any cleaner, the Carribean (BVI, etc.) hasn't made any strides either over the past few years, and Labuan is just... well... scary. That left us with Vanuatu. Given the fact that the regulator wants to become THE offshore FX destination, I felt that it may give us a chance to grow with the regulation, rather than having the regulation skirt our growth. We will see. In the end, this is a step forward toward a larger eventual regulatory footprint.

FXPIG, as a company, actually WANTS some regulatory oversight. However we want something that makes sense, that protects our clients and our business, but does so from a place of experience, not speculation. This may be impossible to find but as I said GROWING with a regulator is one way to attempt to try and make it happen.

To give you an idea of the difference between the FSPR and the Vanuatu VFSC; We have already established banking relationships with the VU license, and it was decidedly MUCH easier than with the FSP listing in NZ, even after 6 years of a spotless record. The FSPR in NZ, at least when it comes to brokers not regulated by the FMA, is drawing to an end, and the FMA Derivatives License is not attractive at all given its capital requirements, but even if it was, they are no longer accepting applications from non-multinational companies.

You also need to take note that as the NZ FSPR is 'unregulated' the company's history when looking to be licensed elsewhere, is not considered, in fact, it is seen as a negative, as 'unregulated experience' is not something regulators like to see. Now a VU License might not hold the prestige a UK FCA license does, but it is, in the end, an actual license, thus it's history can be used as 'regulated experience' when applying elsewhere.

We did not take this step without absolutely 'knowing' it was the best move... for now.

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