We all know that MT4/MT5 white label is the preferred trading platform for Forex trading, but the new white label policy requirements of MetaQuotes are troubling new offshore brokers.

Since the launch of MT4 by MetaQuotes in 2005, MT4 has grown to become a giant in the online forex industry and the software of choice for online retail forex traders. Then in 2010, MetaQuotes launched MT5, an upgraded version of MT4, as a new trading platform that added some new features to MT4, such as support for CFD, stock, options and futures markets.

According to MetaQuotes data from June 7, 2021, MT5 has become a more popular platform than MT4 for the first time in its history, and the developers of its product also say that MT5 has "more than 7 million lines" of code, compared to "2 million lines" in the previous version. As can be seen from these figures, MetaQuotes has been widely favored by the retail Forex CFDS industry and domestic and foreign entities for decades.

However, recent developments suggest that MetaQuotes may be subject to more stringent requirements in order to gauge its standing with global regulators.

So what are the new policies issued by MetaQuotes?

Starting in 2018, MetaQuotes stopped selling its MT4 trading server in order to allow brokers to transition directly to the more technologically advanced MT5 trading platform. But to save costs, new brokers offering forex and CFD services are also using white label services from established brokers with MT4 servers to do business. MetaQuotes also provides white label services for brokerage firms that operate their own Forex and CFD brands using the software provider's infrastructure. Opting for MetaQuotes' white label service is said to be far more expensive than patronizing an established broker.

While this arrangement has been going on for many years, Tianyejun understands that future Forex and CFD brokers are finding it difficult to launch their new brands through white label services. This difficulty often comes down to MetaQuotes imposing stricter requirements on brokers before processing their white label requests.

For example, the most stringent of these requirements is the verification of company accounts that will be introduced in the near future, including company registration certificates, registers of directors and shareholders, and proof of physical address. New brokers will also need to provide a recent certificate of good reputation or employment, as well as a confirmation of domain name ownership, and provide detailed registration information in the full name of the company; Not only that, you also need to provide credit proof or statement that has been verified by the bank. To verify the existence of a valid bank account, which needs to contain the company's registration number and registered address.

While verifying corporate accounts is a huge challenge and also to save costs, most brokers choose to operate in less regulated jurisdictions such as the Seychelles, Vanuatu, Saint Vincent and the Grenadines, with the requirements of offshore jurisdictions more easily met by news brokers than "onshore" locations. As a result, they attract many small brokers who want to enter the retail trading industry.

What is the purpose of the new policy issued by MetaQuotes?

MetaQuotes may want to achieve its position through new policy directions, such as improving the quality of entities entering the brokerage space, providing a safer trading environment for traders, and reducing opportunities for fraud and other bad practices. But when Tianyunjun wants to confirm this further, MetaQuots "cannot engage in any activities related to the company's internal policies." Declined to comment on the matter.

So how will the new policy affect new brokers?

As Tianyan spoke to industry stakeholders, he learned that the new policy requirements were unsettling for new brokers who wanted to establish operations in overseas jurisdictions.

Cristian Vlasceanu, CEO of Centroid Solutions Cyprus, a technology provider that provides risk management, MT4/MT5 bridging and custody solutions for multi-asset brokers, said: The new rules apply to both entities wishing to obtain a white label and those attempting to obtain an MT5 license.

He believes that: "This creates some difficulties for new brokers seeking to set up a white label or MT5 license, as well as for those entities that are already established, have entered the entry process or are about to begin the process, because some entities are set up in jurisdictions and it is not as easy to obtain bank certificates from traditional banks," he said. This has caused some brokers to deviate from their original plans, unable to pass this requirement and having to delay the start of their business, while the requirements required to pass their policy take a significant amount of time."

Industry insiders say that over time, such new regulatory systems will become more sophisticated and demanding, and if you want to protect your own interests, you will need to adapt to the new requirements or find another solution that suits your business interests.

However, another trend that has been observed is Centroid Solutions' preference for obtaining its own dedicated MT5 license, rather than choosing to set up a white label.

He explains this: "MetaQuotes supports this with its new pricing, which makes owning a full license cost-effective. This also gives brokers more control and ability to adjust their offerings without the constraints of WL Settings, which more and more brokers will choose, and we are already seeing many existing brokers migrating from shared white label Settings to use dedicated licenses."

MetaQuotes may have intentionally followed higher onboarding process standards to reach its position in the industry, and CFD brokers are unable to meet the so-called more stringent requirements, especially those seeking to start in offshore jurisdictions, and may continue to migrate to other alternative trading platforms.

They may also choose to move to more established jurisdictions where their chances of meeting these requirements are higher, although the cost of operating in these relatively well-regulated areas may continue to decline.