7.3 Magnitude Earthquake in Vanuatu Raises Concerns about Local Forex Brokers' Operations

A powerful 7.3 magnitude earthquake struck Vanuatu's capital, Port Vila, on Tuesday, claiming the lives of at least 14 people and injuring more than 200 others in the nation of 80 islands with a population of around 330,000 people.

The earthquake severely impacted the nation's critical telecommunications and power infrastructure, potentially disrupting the operations of numerous financial services providers, including FX and CFD brokers.

Multiple commercial buildings in Port Vila's business district sustained significant structural damage, leading to widespread power outages and communication blackouts. This has raised concerns about the business continuity of financial institutions operating in the region.

Until recently, over 600 brokers operated in Vanuatu, taking advantage of the country's relatively lax regulatory approach. However, changes in regulation over the past year have reduced their number to around 80, including some of the biggest FX/CFD brands such as Axi, TMGM, CFI, Exness, and Deriv.

The Vanuatu Financial Services Commission (VFSC) now requires brokers to have a local presence beyond just a P.O. box, and the regulator is preparing to introduce cryptocurrency regulations.

The impact of the earthquake on the local financial services providers remains to be fully assessed, but the disruption to infrastructure may pose significant challenges for brokers and their clients.