eToro is not licensed to operate in Malaysia

According to FinTech News Malaysia, social trading platform, eToro, is not licensed or registered by the Securities Commission Malaysia (SC). Foreign entities are not allowed to carry out regulated activities in Malaysia without being licensed from the SC.

In eToro’s recent announcement to extend its commission-free stocks offering to clients in Asia Pacific, it was revealed that the number of first-time investors in Malaysia had grown over 200% in the first few months of this year. It was also mentioned that 11% of its users in Asia Pacific are from Malaysia.

When FinTech News Malaysia asked them about its legality to operate in Malaysia, eToro says that they are regulated under an Australia Securities and Investments Commission (ASIC) license and investors can trade through that license.

To seek further clarification on eToro’s status, the Fintech news site contacted Securities Commission Malaysia and they were issued the following statement:

“eToro is not licensed or registered by the Securities Commission Malaysia (SC) to carry out any regulated activities in Malaysia including operating a recognised market through an on-line platform. Any person carrying out regulated activity in Malaysia without a licence or registration from/by the SC may, if convicted be liable to a fine not exceeding RM10 million or imprisonment not exceeding ten years or both”

SC has warned that Malaysian investors that deal with unlicensed persons, especially entities that operate offshore, are not protected under Malaysian securities law. This will expose investors to potential fraud and money laundering and may not have access to legal recourse if the event of a dispute.

[ UPDATE 20/05/22 09:00 ] Securities Commission has added eToro into its list of unauthorised websites, investment products, companies and individuals.

[ SOURCE ]

Related reading