brexit

Darwinex & Brexit, once again

We hoped for far more clarity on Brexit than we have, but it’s time to explain the options for Darwinex.

At the time of writing, there’s 3 potential scenarios, ranked in descending severity.

  1. Hard Brexit
  2. May’s “deal”
  3. Postponement

Why Brexit matters

Darwinex is the trading name of Tradeslide Trading Tech. We’re regulated by the UK’s Financial Conduct Authority (FCA) as:

  • A full license brokerage that can deal with retail, as well as professional clients, and
  • An asset management license to offer DARWINs to the same clientele.

As a UK entity, we currently leverage “MiFID passports” to service EU and EEA customers. Brexit could affect none, some or all those passporting rights – which is why we’re writing this post.


“Crashing” out of the EU will not sink the UK in the Atlantic

Neither will Brexit sink your Darwinex funds, they will continue to enjoy:

Furthermore, there’s no agenda restricting capital flows between the UK and the EU. Which means you will continue to have control over where you send your monies:

  • EU residents can trade with Australian regulated brokers, and
  • EU residents can trade with off-shore regulated brokers, and thus
  • EU residents will be able to trade with FCA-regulated brokers.

The EU will not force you to trade with EU-regulated brokers. Reverse solicitation will apply, nothing will stop EU customers from engaging UK entities.


The Brexit question mark then is – will UK entities keep permission to engage EU customers? If yes, how?

In a nutshell, Brexit (even Hard Brexit) will

  • NOT affect existing customers – the FCA will continue to regulate the relationship.
  • NOT affect any non-customers reading this post – they engaged Darwinex unsolicited.
  • Affect the way Darwinex proactively markets to prospective customers.

Given our very limited (if any) outbound marketing, we expect little to no short-term impact.


Every other Brexit scenario

Given the farce Brexit has become, we’ll quote a Member of Parliament who summed it up: “F*ck knows“.

For our part, we’ve had it with the uncertainty, and will:

  • Keep our FCA license no matter what – London remains key to our institutional expansion
  • Potentially secure EU regulation depending on if there’s a Brexit (may well not be one!) and if Brexit results in Darwinex losing passporting rights.

Work to deliver the vision – we’ve wasted enough time as it is.


Questions?

We appreciate there’s plenty of uncertainty, but there’s little more we can add to the above at this stage.

Feel free to ask – we’ll do our best to explain our stance on the matter.


Photo by Tiocfaidh ár lá 1916 en Foter.com / CC BY-ND

5 replies
  1. Des
    Des says:

    In relation to Brexit potentially affecting the way Darwinex proactively markets to prospective customers, please advise if this will impact the Affiliate/Referral programs in some way.
    Do you envisage any problems for existing partners in their referring EU customers – top traders (the scouting program), traders & investors (the affiliate program) – to Darwinex? How will it all work after Brexit?

    Reply
    • The Market Owl
      The Market Owl says:

      Thanks for the comment Des. Neither of the Brexit scenarios should affect this as in case of a no-deal Brexit we’ll get an EU license. No problems foreseen on this front.

      Reply
  2. J.M.
    J.M. says:

    Hope if that if you get regulated in Spain, you are not restricted by the differing regulations.

    For example, other Spanish broker (iBroker) told me they only allow wire transfer deposits (no e-money wallets) because they are not allowed by the Spanish regulator, not sure if that information is correct indeed.

    It would be a big step back now that you have started expanding your payment methods.

    Reply
  3. Ali Shah
    Ali Shah says:

    its my first time to get involved in CFD trading and also the first time to deposit with any Broker outside Germany. My fear in the case of No-Brexit is Regarding the Insurance coverage for a negative account statement.

    e.g in my Account I am long on GBP, if GBP flash crashes 1000 pips my account is for sure blown up. my account might go in to the negative territory as well.
    a dumb question is how am I protected in this case.

    in worst case scenario: will I get some refund for the lost amount or how this insurance policy works?

    Reply
    • The Market Owl
      The Market Owl says:

      Thank you for the question Ali!

      Our broker offers negative balance protection to all our retail users. This is because as an FCA regulated entity we’re bound by ESMA regulation. We expect negative balance protection to remain part of the FCA regulation even in case of a Hard Brexit.

      But more importantly: Darwinex will not prosecute retail customers for negative balance, especially under the current leverage regime, where the probability of negative balance is negligible.

      Reply

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