XM Trading is a world-famous FX company, but it is not registered with the Japanese Financial Services Agency. Therefore, some Japanese say that XM is a dangerous and illegal Forex company. On the contrary, it is true that there are traders who can only use XM in excellent companies. So I investigated the relationship between XM and the Financial Services Agency, so I wrote an article.
- XMtrading
- Regarding the Relationship between XM and the Financial Services Agency (FSA)
- Why XM Doesn’t Register with the Financial Services Agency
- ① What happens if you register with Japan’s Financial Services Agency?
- ② It’s the exact opposite of XM’s business model.
- ③ Extremely heavy costs and obligations
- ④ “High leverage” is normal by global standards
- ⑤ “Not registering” does not necessarily mean “illegal.”
- ⑥ Why can they continue to provide services to Japanese users?
- Risks and Countermeasures of Unregistered Foreign Exchange Brokers with the Financial Services Agency
- Legal Aspects XM Users Should Know
- XM Reputation and User Reviews
- XM’s Safety and Reliability
- Points to Note When Using XM
- ① No Financial Services Agency Protection (Fundamental Caution)
- ② Capital management is your top priority (your lifeline)
- ③ Be Sure to Understand Withdrawal Rules
- ④ Bonus Handling (Missing Points)
- ⑤ Beware of violations of terms and conditions (risk of account freezing).
- ⑥ Tax Pitfalls (Painful Later)
- Related
XMtrading
| Operating company | Tradexfin Limited Fintrade Limited |
| Head office location | Unit E, F28, Eden Plaza, Eden Island, Republic of Seychelles |
| Founding year | 2009 |
| Financial License | （FSA）SD010：Tradexfin Mauritius Financial Services Commission (FSC：)：Fintrade Limited Cyprus Securities and Exchange Commission (CySEC)：Trading Point of Financial Instruments Ltd |
| Language support | English、日本語、Malay、Thai |
| Platform | MetaTrader 4 (MT4)／MetaTrader 5 (MT5) |
| Service Countries | Over 190 countries |
| Number of users | Over 1 million accounts |
| Max Leverage | 1000x |
| Eligible products | Forex、Metal、Stocks、Equity Indices / Index CFD、Energy CFD、Commodities、Cryptocurrency |
Regarding the Relationship between XM and the Financial Services Agency (FSA)
We will clearly explain the relationship between XM (XMTrading) and Japan’s Financial Services Agency (FSA), clarifying commonly misunderstood points.
① What is Japan’s Financial Services Agency (FSA)?
Japan’s Financial Services Agency (FSA) is a public agency responsible for the following:
Supervising financial institutions (securities companies, FX companies, banks, etc.) in Japan
Investor protection (segregated management, leverage regulations, etc.)
Warnings against unregistered brokers
👉 “Financial Instruments Business Registration” is required to operate legally in Japan
② Is XM registered with the FSA?
❌ Not registered
XM is not registered with Japan’s Financial Services Agency (FSA) for the following reasons:
Operates as an overseas corporation (Seychelles, etc.)
Not registered under Japan’s Financial Instruments and Exchange Act
Not subject to Japan’s leverage regulations (maximum 25x)
👉 As a result, the FSA’s official website
may issue warnings to brokers for “operating financial instruments business without registration.”
③ Is the Financial Services Agency calling XM “dangerous”?
❌ It does not explicitly state that it is a “scam” or “dangerous.”
What does the FSA’s warning mean? 👇
“It is not registered under Japanese law.”
“It is not subject to Japanese investor protection rules.”
“The FSA cannot intervene even if problems arise.”
It is a warning.
④ In which countries does XM hold a financial license?
XM holds financial licenses from overseas.
Main examples:
Seychelles Financial Services Authority (FSA)
Mauritius Financial Services Commission (FSC)
👉 While not registered with the Japanese Financial Services Agency,
it is important to note that it is not a completely unlicensed broker.
⑤ Does not register with the Japanese Financial Services Agency mean it is illegal?
❌ It is not illegal for users.
Japanese traders using XM → It is not illegal.
It will not be subject to penalties or punishment.
❗ The problem is
👉 Brokers operating in Japan without registration
Why XM Doesn’t Register with the Financial Services Agency
The reason XM doesn’t register with Japan’s Financial Services Agency isn’t simply because it can’t register, but rather because it deliberately chooses not to (registering would jeopardize XM’s strengths).
Let’s break it down.
① What happens if you register with Japan’s Financial Services Agency?
Registering with Japan’s Financial Services Agency requires you to comply with the following strict domestic rules.
Major Restrictions
Maximum Leverage: Up to 25x
Account Opening Bonuses: Generally Prohibited
Deposit Bonuses: Effectively Prohibited
Advertising and Solicitation Restrictions: Very Strict
Product and Trading Conditions: Limited Flexibility
👉 XM’s greatest appeal would be almost completely eliminated.
② It’s the exact opposite of XM’s business model.
XM’s features are: 👇
Maximum leverage: 1000x
Account opening bonus available
Deposit bonus available
Zero cut (no margin calls)
Small amounts welcome
All of these are:
❌ Unavailable or severely restricted after registration with the Financial Services Agency.
👉 Registration negates the point of being XM.
③ Extremely heavy costs and obligations
Registration with the Financial Services Agency imposes the following practical burdens:
Business burden
Capital requirements in the hundreds of millions of yen
Establishment of a base in Japan
Establishment of a Japanese corporation
Strict internal audit and reporting requirements
Regular FSA inspections
👉 Inefficient for a global FX broker offering services worldwide
④ “High leverage” is normal by global standards
Japan is one of the most regulated countries in the world.
| 地域 | 最大レバレッジ |
|---|---|
| 日本 | 25倍 |
| EU | 30倍 |
| オーストラリア | 30倍 |
| 海外FX（XM等） | 500〜1000倍 |
👉 XM designs its services based on global standards, not Japanese standards.
⑤ “Not registering” does not necessarily mean “illegal.”
This point is important.
❌ XM is an illegal broker → Misunderstanding
⭕ Not registered with the Financial Services Agency → True
⭕ Holds overseas financial licenses → True
👉 The problem is with the brokers operating without registration in Japan, and users are not penalized.
⑥ Why can they continue to provide services to Japanese users?
Providing overseas services over the internet
Japanese support is an “add-on service”
Opening an account is at the users’ discretion
👉 Although it’s a gray area, it has been tolerated for many years.
In fact, XM has a track record of over 10 years
Many Japanese users
No major withdrawal rejections.
Risks and Countermeasures of Unregistered Foreign Exchange Brokers with the Financial Services Agency
We will explain the risks of using unregistered foreign exchange brokers (overseas FX brokers) with the Financial Services Agency and practical countermeasures.
We will explain these risks from a practical perspective, without exaggeration, using a broker like XM as an example.
Lack of Official Investor Protection (Biggest Risk)
What Happens?
Even if trouble occurs
👉 The Financial Services Agency, Financial ADR, and Japanese courts generally cannot intervene.
No compensation system (such as legal enforcement of trust preservation).
Specific examples
Delayed withdrawals/changes in terms
Account freezing issues
Refund issues in the event of broker bankruptcy
Possibility of sudden changes in broker rules
Contents
Changes in leverage limits
Changes or abolition of bonus terms
Revisions to trading conditions (spreads, etc.)
👉 Greater broker discretion than domestic FX
Weak in the event of legal issues
Completely uncontested under Japanese law
May require responses in English or overseas jurisdictions
In reality, some situations require silent acceptance
Risk of termination of service for Japan
Sudden “suspension of new applications from Japanese residents”
Trading restrictions for existing users
*There have been cases of this happening at other companies
Realistic measures to address risk
✅ Measure 1: Don’t invest too much (most important)
Principle
Only an amount that would not affect your lifestyle if lost
Never invest living expenses or savings
👉 Overseas FX is a “high-risk” strategy.
✅ Strategy 2: Withdraw profits frequently.
Don’t let profits accumulate in your account.
It’s important to have a history of withdrawals.
👉
Always check that the “deposit → profit → withdrawal” cycle works properly.
✅ Strategy 3: Perform long-term tests with small amounts.
Don’t deposit large amounts from the beginning.
Completely check deposits, trades, and withdrawals with small amounts.
This is essential even for major brokers like XM.
✅ Strategy 4: Avoid concentrating your investments with one broker.
Spread your funds across multiple brokers.
Combining with domestic FX is also effective.
✅ Strategy 5: Read the rules carefully.
Especially important. 👇
Withdrawal conditions.
Bonus expiration conditions.
Account freezing conditions.
Terms of use and prohibited transactions.
“I didn’t know” is not an excuse.
Legal Aspects XM Users Should Know
We’ll summarize the legal aspects XM (overseas FX) users should know from a practical perspective for those living in Japan.
*Focused on the line between legal and illegal, taxes, and what to do in case of trouble.
① Is use illegal? Will I be punished?
✔ It’s not illegal.
Under Japanese law,
Japanese people are not penalized for using an overseas FX broker (XM).
Arrest/Punishment → ❌ No
Prohibition of Use → ❌ No
👉 The problem is with the brokers operating in Japan without registration, not the users.
② Relationship with the Financial Instruments and Exchange Act
Key Points
XM is not registered as a financial instruments business operator in Japan.
Therefore, it is not subject to oversight or investor protection by the Financial Services Agency.
Impact on Users
Financial ADR (ADR) is not available.
Japanese government agencies generally cannot intervene.
The contract is a “private contract with an overseas corporation.”
👉 The scope of personal responsibility is very broad.
③ Legal Position in the Event of Trouble (Important)
Possible Issues
Withdrawal Delays or Refusals
Account Freezing
Allegations of Terms of Service Violation
What Are the Legal Repercussions?
It is difficult to litigate in Japanese courts.
There is a possibility that the dispute will be in English or in an overseas jurisdiction.
In practice, there is a risk of having to accept the situation without complaint.
👉 This is the biggest legal risk of being “unregistered with the Financial Services Agency.”
XM Reputation and User Reviews
Below is a compilation of reviews, testimonials, and user testimonials from actual users of XM (XMTrading), including positive, negative, and neutral examples. These authentic user testimonials are culled from overseas review sites and forums.
👍 Positive Reviews and Testimonials (Supportive Testimonials)
✅ Popularity, Reliability, and History
Many reviews praise the platform for its “high profile and long-standing reputation.”
→ Founded in 2009, it’s popular with traders worldwide.
✅ Beginner-Friendly Trading Environment
Many reviews highlight the benefits for beginners, such as “starting with a small amount” and “easy-to-build funds thanks to bonuses.”
✅ Extensive Japanese Support
The Japanese support is highly rated, with many users saying that even those new to FX trading overseas can consult with confidence.
✅ Ease of Use of the Platform
Some users praise the order functions, app usability, and execution stability.
For example, specific comments include, “The interface was easy to use, and withdrawals were smooth.”
👎 Negative Reviews (Complaints)
❌ Wide/High Spreads and Fees
Especially with standard accounts, some users complain that “the spreads are wide and the fees feel heavy.”
This is often a complaint from short-term traders and scalpers.
❌ Complaints About Withdrawals and Support
On overseas review sites (such as Trustpilot), you can often find reviews that describe “slow withdrawals and delayed response times” or “no replies to inquiries.”
Some reviews include users complaining about withdrawal procedures and customer support.
❌ Reports of Account/Trading Issues
On overseas message boards, there are also negative comments about trading experiences, such as “my account was blocked” or “my position was treated as fraudulent” (all of these are subjective user comments).
XM’s Safety and Reliability
The following are objective points regarding the safety and reliability of XM (XMTrading).
*Because overseas FX differs from domestic FX, this is a balanced evaluation that includes not only benefits but also points to note.
✅ [1] Licensing and Regulation (Foundation of Reliability)
① Holding Multiple Financial Licenses
XM is licensed by overseas financial supervisory authorities.
Main Regulations (May vary by country/location)
✔ Cyprus Securities and Exchange Commission (CySEC) — Strict EU Regulations
✔ UK Financial Conduct Authority (FCA) — Strict UK Regulations (Obtained by the Group)
✔ Australian Securities and Investments Commission (ASIC) — Australian Standards
✔ Seychelles Financial Services Authority (FSA), Mauritius Financial Services Commission (FSC) — Principal License for Japan
👉 Being under multiple regulatory supervisions around the world ensures the broker’s fundamental reliability.
✅ [2] Customer Fund Management (Safety)
① Segregated Accounts
Company operating funds and customer funds are kept completely separate.
Even in the unlikely event of a broker’s bankruptcy, customer funds are kept out of reach of creditors.
Note: While “trust protection” is the norm for domestic FX, “segregated management” is more common for international FX.
② Compensation System Available (Limited to Certain Regions)
In the EU, under the jurisdiction of CySEC, the Investor Compensation Fund (ICF) may be available (compensation up to a certain amount).
✅ [3] Track Record and Operating History (Proof of Reliability)
Established between the late 2000s and 2009, with over 15 years of operating experience.
Users in many countries and regions worldwide, popular with Japanese traders.
Tradition and size are important indicators of safety.
⚠ [4] Withdrawals and Support Reviews
Real User Testimonials
Positive Reactions
✔ Some users reported smooth withdrawals within 1-2 days.
✔ Some long-time users reported no major issues.
Negative Reactions
❗ Some users reported slow withdrawals and slow support responses (varies by region and situation).
❗ Some users reported being “unhappy with the service” (from an overseas message board).
※ While this is a common trend with all brokers, reviews have noted that support for overseas FX brokers can take longer than for domestic FX brokers.
⚠ [5] Strength of Regulations (Differences in Safety)
① Strict regulations in the EU, UK, etc. are strong.
Regulators such as CySEC and FCA have strict screening and audit requirements and are considered to have a high level of investor protection.
② Seychelles and Mauritius licenses are intermediate level.
FSA and FSC licenses can be evaluated based on whether they are regulated or not, but some say they are not Tier-1 (the highest level in the world).
👉 As a result,
Trading with EU and UK licenses is relatively safe.
The general assessment is that trading primarily in Seychelles and Mauritius is supervised, but not as strictly as domestic FX.
Points to Note When Using XM
Here are some practical points to note when using XM (overseas FX), focusing on “points where you could easily lose money without knowing.”
① No Financial Services Agency Protection (Fundamental Caution)
XM is not registered with the Japanese Financial Services Agency
Not covered by the Investor Protection and Dispute Resolution System
Japanese public institutions cannot intervene in the event of a dispute
👉
It’s dangerous to “trend like you would domestic FX”
② Capital management is your top priority (your lifeline)
⚠ High leverage = instant loss
Up to 1000x leverage can be used as both a weapon and a lethal weapon
A few pips of reverse movement can lead to a stop loss
Countermeasures
✔ Start with a small amount
✔ Risk per trade should be no more than 1-2% of your balance
✔ Never invest living expenses
③ Be Sure to Understand Withdrawal Rules
Common Misconceptions
❌ “Profits are immediately returned to your card.”
❌ “It’s the same regardless of the deposit method.”
Reality
Only the amount deposited is refunded to your card.
Profits are generally paid via bank transfer.
Deposit and withdrawal methods are closely linked.
👉 Most withdrawal issues are due to a lack of understanding.
④ Bonus Handling (Missing Points)
Points to Note
Bonus is forfeited upon withdrawal.
Risk of confiscation due to trading in violation of terms and conditions.
Hedging and arbitrage are prohibited.
👉
The biggest danger is thinking, “It’s free, so I’ll just use it carelessly.”
⑤ Beware of violations of terms and conditions (risk of account freezing).
Common Violations
Illegible hedging between multiple accounts.
Taking advantage of rate discrepancies with other brokers.
Improper use of automated trading.
Using accounts under family members’ or other people’s names.
❗ Even innocent users can be found guilty.
⑥ Tax Pitfalls (Painful Later)
Tax System
XM Profits = Miscellaneous Income (Comprehensive Taxation)
Progressive Taxation (Up to 55%)
Caution
Taxable Even If Withdrawals Have Not Been Made
Bonus Profits are Taxed
Failure to File a Tax Return is Subject to Penalties
👉 If You Don’t Know, Taxes Will Hurt You More Than Profits
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