Contrary to erroneous reports which have appeared on certain blogs, Warsaw based X Trade Brokers Dom Maklerski SA (WSE:XTB), which operates Retail Forex broker XTB.com as well as the X Open Hub trading platform, has indicated in regulatory filings that it does indeed plan to carry forward its plans to leave the Turkish Retail FX market, and to liquidate its subsidiary in the country X-Trade Brokers Menkul Degerler A.S.
XTB indicated that it plans to liquidate its Turkish subsidiary by mid-2018.
As we reported earlier this year, XTB took a write-down of intangible assets of PLN 5.6 million in its first half 2017 financials relating to its Turkish brokerage license.
New rules were passed earlier this year in Turkey by the Capital Markets Board (CMB), setting maximum leverage of 10x for Forex and CFD trading, and requiring minimum client deposits of TRY 50,000 (about USD $14,000). The new rules were put in place by the Turkish government as part of measures taken to stem speculation in the depreciating Turkish Lira – which seem to have worked, as the Lira has indeed stabilized in 2017. The Turkish regulator then banned all accounts and trading with foreign Retail FX brokers.
The new regulations led brokers serving the Turkish market, such as XTB, to withdraw and considering shutting their operations in the country.
XTB did leave open the possibility of returning to Turkey at some point, stating that “the Management Board of the Company does not exclude the resumption of operations in Turkey“, should regulations relax at some point.
The full filing made by XTB reads as follows:
CURRENT REPORT NO. 39/2017
Warsaw, 30 November 2017
Update of information on the operations of the XTB Capital Group on the Turkish market
With reference to the current report No. 15/2017 regarding the withdrawal of the XTB Capital Group from the activity on the Turkish market and the current report No. 5/2017 regarding legal changes resulting in the restriction of operations on this market, the Management Board of X-Trade Brokers Dom Maklerski S.A. (“The Issuer”, “the Company”, “XTB”) announces that on November 30, 2017 it has decided to suspend its activities on the Turkish market by the end of the first half of 2018 and liquidate its subsidiary X-Trade Brokers Menkul Degerler A.S.
The decision to suspend operations aimed at extinguishing activity on the Turkish market results, among others the analysis completed on the same day by the Issuer on the basis of a legal opinion prepared by a law firm operating on the Turkish market according to which there are indications of the possibility of mitigation by Turkish regulator i.e. Capital Markets of Turkey (CMB) changes in regulations regarding the operation of investment services, investment activities and additional services (indicated in the abovementioned current report No. 5/2017), which formed the basis for the Management Board’s decision to cease operations on the Turkish market.
Therefore, in case of favorable solutions in the area of mitigation of regulations introduced by CMB, the Management Board of the Company does not exclude the resumption of operations in Turkey.