Is online broker OctaFX banned in India? Everything you should know
Learn whether you can still trade with the broker and what should OctaFX’s clients know about it being accused of providing illegal trading services.
Recently, Indian authorities stated that OctaFX and several other international brokers, including eToro, Exness, and XTB, operated in India illegally. Those brokers were put on the alert list of entities engaged in providing trading services on unauthorised electronic trading platforms. Let’s analyse if those accusations have a solid basis underneath them and whether OctaFX is really banned in India.
Is OctaFX legal in India?
OctaFX is an international company and, as such, possesses the incorporation documents allowing it to offer its trading services globally. It currently serves clients in more than 180 countries and, apparently, does it well. The broker has garnered more than 60 industry awards, including the ‘Best FX Broker India 2022’ award and the ‘Most Reliable Broker Asia 2023’ award from World Finance and Global Forex Awards, respectively.
Recently, Indian authorities issued orders for provisional attachment of the funds allegedly belonging to OctaFX (recently renamed to Octa). However, this case does not seem to be valid. If you look into the broker’s incorporation documents on its site, you’ll see that the company the seized funds belonged to—OctaFX India Pvt. Ltd.—is not the company that owns OctaFX. Most likely, it was some copycat scheme involving the broker’s name, which fraudsters could use to scam OctaFX’s clients, for example, by using fake trading apps.
The question remains, however, why OctaFX does not possess an Indian licence authorising it to provide trading services under the Indian legislation. This is a complex issue involving most international Forex and CFD brokers. Let’s try to understand why so many brokers are not eager to obtain local licences.
The Forex market is a decentralised market where trading is happening 24 hours a day, five days a week. It is the largest and most liquid market in the world—attempting to regulate it in any one country severely affects its dynamics and the conditions the traders get.
The regulatory frameworks local regulators, such as RBI, impose on Forex brokers who wish to obtain a local licence, are often too restrictive in terms of the brokers’ trading instruments, conditions, promotional offers, and much more. Those regulatory rules might even restrict the number of liquidity providers a broker can partner with, which could result in more frequent slippages, chart anomalies, and lack of liquidity.
Therefore, it is obvious why the majority of international Forex brokers choose to either not obtain local licences or get them in select jurisdictions, where the regulatory frameworks do not affect the unique features that help them win the competition in the international Forex arena.
As for OctaFX, it possesses licences from FSCA in South Africa and CySEC in Cyprus. Given this fact, it’s highly unlikely that OctaFX in India is a fraudulent scheme.
How does OctaFX work in India?
The international broker OctaFX works in India, just as it works in most countries worldwide There are no indications that the company plans to stop operating in any of those countries.