FortuneZ learned on Wednesday that retail broker ActivTrades has closed its office in the United Arab Emirates (UAE) and returned its Dubai Financial Services Authority (DFSA) license. The broker opened its office in the UAE at the start of 2017 in an effort to broaden its clientele in the Middle East.
But licenses from the DFSA have become more of a target for brokers looking to attract high net worth individuals. Leverage in Dubai is effectively capped at 20:1 and a number of other restrictions, in line with Islamic law, apply to traders in the Gulf country.
Speaking to FortuneZ, an ActivTrades spokesperson said that the decision had been guided by both political factors and a change in the company’s strategic outlook.
ActivTrades: Focusing on Latin America and Europe
Tensions in the Middle East, particularly with regard to Saudi Arabia’s efforts to blockade Qatar, have affected traders’ risk appetite – shrinking volumes for brokers. A number of other Arab countries, including Jordan and Egypt, have severed ties with the small Gulf state in support of Saudi Arabia.
That, according to a company spokesperson, has not only affected ActivTrades’ growth in the region but has caused other brokers to relocate as well.
Though it may be shuttering its office in Dubai, the company will still maintain a Middle East desk in London. Moreover, the company has plans to expand in Europe and Latin America.
In June of this year, the company opened an office in the Bahamas. ActivTrades Corp, which has a license from the Securities Commission of the Bahamas, will be focusing its efforts on the South American retail market.
ActivTrades also said that the European Securities and Markets Authority’s product intervention measures, which went live in August of this year, had led it to change tack in Europe. Unlike many other brokers, who are pulling away from the European market, ActivTrades will be looking to expand its offering in the region.