As you may be aware, Brexit negotiations are ongoing and, as of the date of this post, the date for the UK to leave the EU has been extended.
How does this affect you?
Regardless of how Brexit turns out, your current eToro account and how we communicate with you should be unaffected. We explain below why both a deal and a no-deal Brexit will not affect your eToro trading account.
Your eToro account
eToro operates in the UK and in the EU via two entities, eToro (UK) Limited and eToro (Europe) Limited.
eToro (UK) Limited (“eToro UK”) provides trading and dealing services on behalf of its clients, the majority of whom are UK residents. eToro UK is authorised and regulated by the Financial Conduct Authority (FCA) in the UK as an investment firm. In addition to servicing UK residents, this authorisation allows eToro UK to provide investment services to clients living in the European Union through what is known as “passporting” rights.
eToro (Europe) Limited (“eToro Europe”) provides trading, dealing and copy trading services to clients worldwide, but predominantly to clients resident in the European Union, including the UK. It also acts as the counterparty to trades entered by clients of eToro UK, and provides copy trading services directly to clients of eToro UK through its passporting rights. eToro Europe is authorised and regulated in Cyprus by the Cyprus Securities and Exchange Commission (CySec).
What happens if there is a deal?
If there is a deal between the UK and the EU, both eToro UK and eToro Europe’s passporting rights should remain and there should be no changes to your account.
What happens if there is no deal?
If the UK leaves the EU without a deal, eToro UK will lose its ability to passport services to countries in the EU. However, if you reside in the European Union and have an account with eToro UK, we will act in your best interest and continue to provide existing services to you at your request to the extent that we are permitted to do so.
Equally for eToro Europe, a no-deal scenario would mean that it will lose its ability to passport the copy services into the UK. However, the UK Financial Conduct Authority has introduced a Temporary Permissions Regime which will allow European firms to continue to provide services to UK clients in the event of a no-deal Brexit. eToro Europe will apply for this temporary permission so it will be able to continue providing copy services to you. We will contact you if this changes.
Your regulatory protections
Regardless of the outcome of Brexit, your financial and other regulatory protections will remain unaltered, whether your account is with eToro UK or with eToro Europe. In the UK these include your access to the Financial Services Compensation Scheme, the Financial Ombudsman Service and segregation of client funds, among others. In Cyprus these include access to the Investor Compensation Fund, the Financial Ombudsman Service and segregation of client funds, among others. In both the UK and the EU, the recent measures to protect retail clients in relation to trading Contracts for Difference still apply.
We continue to monitor the developments as they unfold, and we will communicate with you in the event of any significant change. In the meantime, should you require any further information please do not hesitate to contact us.
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