MetaQuotes Sparks Broker Exodus, Reshaping Prop Trading

MetaQuotes, the developer behind the popular MT4 and MT5 trading platforms, is intensifying its oversight, causing a direct impact on brokers and proprietary trading firms catering to US clients.

This stricter approach has resulted in several prop firms discontinuing services, exemplified by Australian broker Eightcap, which declared its decision to cease serving proprietary trading firms by February 29.

This unexpected move has left many in the industry scrambling for alternatives. Matt Lark, CEO of Lark Funding, shared this development on X, expressing that while Eightcap's decision poses a setback, reassurances from ThinkMarkets regarding their operations and “solid relationship” with MetaQuotes have been received. Lark acknowledged the necessity for the prop trading industry to diversify brokerage relationships, assuring traders of plans in place for a smooth transition from Eightcap to new brokers.

The community's response has been a mixture of concern and confusion. Conversations on X indicate an urgent need to adapt to these changes, with compliance timelines reportedly varying according to different sources. Speculation suggests that brokers violating jurisdictional regulations must rectify their status by as late as June 30.

The impact of these policy changes reverberates globally, affecting prop firms and their clients. Notably, Top Tier Trader has reportedly restricted traders from several countries, including the UK, India, and Germany, offering refunds while withholding payouts.

Meanwhile, prop firms like The5ers and Smart Prop Trader openly discuss the challenges arising from brokers' reluctance to onboard third-party clients, a practice now under scrutiny. These firms argue that the indirect relationship between prop traders and brokers complicates compliance with regulatory standards. Consequently, a shift towards brokers accommodating third-party arrangements, such as cTrader, is underway.

Prop firms affected by the shift away from Eightcap and seeking new brokerage services include Blue Guardian, Funded Trading Plus, and The Funded Trader. Those relying on ThinkMarkets encompass AquaFunded, Bespoke, Forex Capital Funds, Goat Funded Trader, Instant Funding, Lark Funding, Ment Funding, My Flash Funding, My Funded FX, Skilled Funded Traders, Swift Funding, The Funded Trader, and Traddoo.