The Vanuatu Financial Services Commission (VFSC) is requiring offshore brokers to set up physical offices in the jurisdiction; Those who do not meet this requirement will have their license revoked by VFSC. The new rules will take effect on October 16. In addition, offshore brokers are required to appoint a local manager and director.

The new rules are not sudden. Back in March 2021, the regulator had formally adopted legal provisions on physical presence requirements for all licensed currency pair brokers. So far, only four currency pair and CFD brokers have met the new rules, namely FXPrimus, Titan FX, TradeNext and MFM Securities.

Vanuatu is one of the prime jurisdictions favoured by offshore brokers due to its light regulation. However, at present, tightening regulations and the increasing maintenance costs of Vanuatu licenses are cooling the enthusiasm of offshore brokers to visit this destination.

Martin St-Hilaire, President of the Vanuatu Financial Markets Association, said: "Our regulators only want to attract the most serious applicants. If they are sincere in their intentions, focused in their approach and intend to do business right in Vanuatu, then the VFSC will be flexible and patient. Our country wants to transition from an offshore, protected financial centre to an onshore, transparent fintech hub, bringing about a sea change in the way we do business."

Source: FX110