DEGIRO has told us that they are accepting clients from the UK again after the UK subsidiary of Pan-European low-cost stock broker FlatexDegiro has stopped onboarding new client accounts last year.
Back in May 2023 GEGIRO wrote to its marketing affiliates and partners saying that it was pausing UK acquisition campaigns and client onboarding for regulatory reasons, without saying what they might be. In its brief communication with the Good Money Guide, the firm says that it hopes to start accepting UK client accounts again in the next two to three months. However, confirmed as of today, DEGIRO is open for business again in the UK.
UK regulation
Firms can be prevented from onboarding new clients if a regulator feels that its internal processes, record keeping and safeguards are not robust enough.
Degiro UK is not directly regulated by the UK FCA, instead as a German /Dutch brokerage its activities are overseen by European regulators, BaFin in Germany, and the DNB and AFM in the Netherlands.
Degiro has had issues in the past, having been criticised over its execution practices, including using an internal hedge fund as a counterparty and selling client orders to specific execution venues.
In 2021 the Dutch National Bank. the DNB raised concerns about the stability of the firm’s IT infrastructure and ruled that it was insufficiently secured against hacks and crashes.
As a result, Degiro was forced to set aside more than €3.0 million against required upgrades to its IT systems.
The firm says it has now made a significant investment in this area.
Similar issues
FCA-regulated broker Trading 212 was forced to halt its client onboarding in January 2021, during the meme stock boom as thousands of new day traders flocked to the platform.
At the time Trading 212 said it was seeing unprecedented demand and would reopen to new business once it had finished processing the backlog of account applications.
The firm’s mobile trading app crashed due to the surge in trading volumes and interest in opening new accounts.
Back in May 2015 Israeli-based broker Plus500 stopped onboarding clients at its UK business, as regulators looked at the firm’s client verification procedures.
Though that decision was said to be voluntary, rather than one thats was forced on the firm by the FCA. Plus500 was able to resume onboarding new accounts in December of that year.
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
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