Plus500 Begins Transferring Israeli Clients to Local Jurisdiction

As the Israeli regulations are expected to be enacted within a year, some applicants seem to be taking steps on the ground. According to the information obtained by Finance Magnates, several Israeli clients of Plus 500 were forced to close their existing accounts and were directed to opening new ones.

Such steps can differentiate the companies intending to obtain a license from those using the application to exploit a legal loophole

The new accounts' terms offer much lower Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term than the typical Plus500 offering. Unsurprisingly, the adjustments made to the offering are in full Compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term with the harsh regulatory framework for forex and CFDs brokers willing to legally operate in Israel.

In April, Finance Magnates revealed that Plus500 would be among the applicants for the Israeli license. With relatively a big number of applicants with the Israeli Securities Authority (ISA), it seems that at least some firms have merely applied for a license in order to get a waiver for operating legally in Israel until their application has been reviewed by ISA.

As the process will reportedly take as long as a year, such proactive steps by brokers like Plus500 can be understood as the first major distinction between companies intending to obtain an Israeli license and those who merely use the waiver to take advantage of a legal loophole for that period of time.

Elad Even Chen, Finance Director at Plus500, confirmed that the broker has commenced implementing the requirements of the Israeli regulator as part of its application process.

If the accounts changes at Plus500 are indeed due to the new regulatory framework in Israel, a number of other brokers operating in the country could also take similar measures shortly. That in turn could lead to a diminished local retail market, much like the US precedent. However, it remains to be seen if the Israeli regulator is able to act as effectively as the American one in terms of enforcement.