Hot on the heels of XTB UAE Plus500 is the latest multi-asset broker and would be fintech to acquire a new license in the UAE. Israeli-based but London-listed Plus 500 has secured a coveted authorisation from UAE regulators, namely a license from the Securities and Commodities Authority (SCA), the body that regulates firms who do business with local individuals and businesses. This has historically been the harder of the two Dubai authorisations to secure.
Why has Plus500 become authorised under the SCA?
The DFSA license allows firms to act for and with locally based expats and clients based offshore, whether retail or institutional.
But as UAE gathers critical mass as a financial centre in its own right, brokers are turning their attention to the local market as well.
The new authorisation will allow Plus 500 to offer leverage of up to 300:1, well above what’s available to retail clients in the UK and Europe.
The broker will also offer what it describes as a complete suite of crypto assets and it is also introducing credit card payments, allowing clients to make deposits into their trading accounts from their credit cards, something which hasn’t previously been on offer.
How will Plus500 operate under the new authorisation?
Plus 500 will operate under the SCA licence as Plus 500 Gulf Securities LLC in the UAE, a separate but wholly owned subsidiary that is headquartered in Dubai. Its DFSA authorised entity is Plus500AE Ltd.
Under the SCA, the firm is authorised as a broker in the international markets and can offer CFDs and OTC derivatives in FX spot, and various other underlying markets.
In total, the UAE business offers more than 2800 trading instruments.
Client money will be held in segregated client money bank accounts and are thus separated from the businesses own money, and the firm says that it does not use client funds for hedging and investment or for any other business purposes.
Is there a Premium or VIP account?
Given that the SCA authorisation will allow Plus500 to act for HNWI locally in Dubai and the wider UAE. It is perhaps no surprise that the firm is offering a premium account in the region, with dedicated client managers, expert analysis of trading events together with enhanced bonuses and trading rebates.
However, the broker doesn’t say what criteria a would-be client needs to meet to gain access to the premium service.
It remains to be seen if leveraged products that charge and pay interest, by way of overnight funding, will strike a chord in a country that is still very much Muslim at heart.
In the past, other firms have used a futures pricing model, in which the cost of carry is rolled into the quoted price, in order for margin trading to meet sharia requirements.
It’s also interesting to note that there is no mention of exchange-traded futures and options, which the firm now offers in other regions
It will be intriguing to see how this develops going forward.
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