Exclusive: JFD Quietly Closed Chinese Office as PSP Problems Continue

Finance Magnates has learnt that JFD Brokers (JFD) closed its  in May of this year. According to Doris Zhang, formerly at JFD, the firm faced problems with payment service providers (PSPs).
“All brokers were struggling with it and trying to find solutions.” Zhang told Finance Magnates, “Unluckily, all payment solutions were blocked by the authorities.”

There is certainly truth to this. Just last month, Finance Magnates covering problems brokers are facing in China.
At the top of the list were payments. Every broker and consultant that Finance Magnates spoke to had struggled to find an effective means by which to process client funds.
An example of the problems brokers are facing came in late 2017, when the People’s Bank of China (PBoC), the country’s central bank,. These were not small-fry, shady brokers either – IG and Alpari were among the names listed by the PBoC.
JFD – doing things by the book
That order came at roughly the same time JFD was attempting to establish a foothold in the country. Zhang noted that the broker had attempted to do everything by the book but the problems it faced were out of its control.

Victor Tomov, a Managing Director at JFD, would not confirm if PSPs were the root cause of the broker’s office closure in China. He did confirm, however, that the office in the country had closed.
“We did close our office in China,” Tomov told Finance Magnates, “and currently we serve the clients from China via our Cypriot licensed entity – JFD Brokers.”
This state of affairs also looks to be short-lived, as Tomov noted that those clients are being shifted to JFD Overseas. Still a part of JFD, this subsidiary firm is regulated in the Pacific island of Vanuatu.
Office closed, trading open
As is evident from Tomov’s statement,  JFD is still providing its services to people in China despite having no physical presence there. The broker’s quiet closing of its office in the country seems to have been aimed at preventing any discord amongst those clients.
“They don’t want to make any uneasiness for traders,” said Zhang, “because clients from China are still trading with JFD.”
This would indicate that JFD has trodden a path that many other brokers have already taken. With difficulties inside China itself, many brokers continue to serve Chinese clients from offices outside of the country, particularly in other East Asian countries like Malaysia and the Philippines.
Given the Wild West nature of the Chinese market, however, it’s equally plausible that JFD could be returning to the country. The authorities in China have treated the retail industry erratically and it is entirely possible that they will give their approval to brokers in the future.