Why are countries prohibited?

[Mvxmv]

Some cases are pretty obvious such as North Korea. Others not so much. Why would a broker prohibit France, Canada, Lybia or Slovenia? I understand that there is no one-size-fits-all answer to this because each broker has their reasons. But I wonder if there is any reasonably predictable pattern or standard for such choices. Could one or another country be prohibited because it regulates too much and the broker doesn't want to have to deal with it?

 

[FxMaster]

Some cases are pretty obvious such as North Korea. Others not so much. Why would a broker prohibit France, Canada, Lybia or Slovenia? I understand that there is no one-size-fits-all answer to this because each broker has their reasons. But I wonder if there is any reasonably predictable pattern or standard for such choices. Could one or another country be prohibited because it regulates too much and the broker doesn't want to have to deal with it?

You gave the answer in your question already its because regulations are too much and the broker doesn't want to have to deal with it.

 

[pashaev]

The broker imposes restrictions on working with citizens of some countries at the request of its regulator.

 

[Komondar]

Regulatory compliance, legal considerations, risk management, and operational efficiency. Reasons can vary between broker

 

[Chadistrading]

I think there is no question about restricting countries under UN sanctions; the rest might be based on their provider's or regulator's request, and well, some might be based on the broker's experience with clients from special countries!

 

[ArnavDeshmukh]

Some cases are pretty obvious such as North Korea. Others not so much. Why would a broker prohibit France, Canada, Lybia or Slovenia? I understand that there is no one-size-fits-all answer to this because each broker has their reasons. But I wonder if there is any reasonably predictable pattern or standard for such choices. Could one or another country be prohibited because it regulates too much and the broker doesn't want to have to deal with it?

I think the answer is obvious about the under-sanction countries. And also Brokers assess the level of risk associated with providing services to clients from different countries.

 

[Komondar]

For example, Due to regulatory requirements and compliance concerns, some forex brokers have restricted their services for clients in Russia.

 

[Arafx]

It is crucial to remember that each broker has its own regulations and justifications for imposing such limits, even if there may be many different reasons why a broker could forbid trading from particular nations.

 

[Nicholasbrownie]

Some cases are pretty obvious such as North Korea. Others not so much. Why would a broker prohibit France, Canada, Lybia or Slovenia? I understand that there is no one-size-fits-all answer to this because each broker has their reasons. But I wonder if there is any reasonably predictable pattern or standard for such choices. Could one or another country be prohibited because it regulates too much and the broker doesn't want to have to deal with it?

Brokers may prohibit certain countries for reasons like regulatory complexities or higher risk factors. The specific reasons can vary, but it's usually a mix of factors that guides their choices.

 

[Pharaoh]

Imagine a county that forbids ANY broker not registered with its national regulators from offering services in that country. Only a small number of forex and crypto brokers offer services to the US, and only a small percent of those are 100% legally doing so. The US isn't the only country that does this. Just to complicate things, Canada has similar regulations, but those are controlled at the provincial level, so a broker might be perfectly legal in some parts of Canada while not being able to legally serve people in other provinces.

Fewer countries forbid their companies from doing finforex type business with offshore clients, but, in the world of fiscal regulations, stranger things have happened. I have seen a number of real stock brokers (the ones where you buy and sell on the exchange and actually OWN the shares, not the CFD type offered by many forex brokers) that only offer services in their own countries. Stock trading is older than currency trading, and is usually far more carefully regulated.

Some countries are subject to international sanctions, so any transfers of money in and out them risks violating anti money laundering (AML) rules. Other contries (such as Cuba) are subject to US sanctions and the US has been known to take actions against companies that do business in those countries even though doing business there is not a violation of international law.

Believe it or not, there are ways to try to game the system on bonuses and affiliate commissions. Most of these would be avoidable if the brokers set up their rules in a more intelligent fashion, but that doesn't stop them from getting annoyed when one or more large groups in a country find a way to get guaranteed profit by exploiting loopholes. Sometimes this gets so bad that the broker decides that it's not worth doing business in a specific country instead of figuring out how to close the loopholes.