US-based brokerage offloading Maltese clients following greylisting

Local users of Tastyworks, an options, stocks and futures brokerage based in the United States, are being notified that their accounts will be closed down as Malta has been placed on a list of blocked jurisdictions with its clearing firm.

In what seems to be the first recorded instance of the impact of Malta’s greylisting on retail investors, the Chicago, Illinois company sent an email to users based in Malta to inform them that it would no longer be able to support their accounts.

“To prevent any further trading activity, your account has also been set to closing only,” the email read.

“Please close out of all remaining positions and then withdraw all remaining funds. After you have made the withdrawal and the funds are in your bank account, send our accounts team an email to request your account be closed due to the restriction.”

The email, dated 13th July, stated that the restriction would take immediate effect, and that any open trades would be automatically closed by 16th July.

However, a subsequent email, sent later that day, back-pedalled on the urgency of the closure, and stated that Malta-based accounts would no longer be supported from 20th August.

Maltese accounts will be set to closing only on 13th August, with any remaining open positions liquidated on 20th August.

At least two Maltese users, who preferred not to be named, have been affected by the decision.

One of them expressed his frustration that the Long-term Equity Anticipation Securities (LEAPS) he had purchased are still far from maturing.

“The issue with an options trading account,” he said, “is that trades are time-sensitive. Money is lost on trades which right now are in red but were bought to be profitable months or years down the line.”

“I had options contracts expiring in two years’ time,” he continued. “Trades which would have made quite a substantial amount of profit given how things were looking.”

However, he believes it would not be worth fighting Tastyworks’ decision individually, pointing out that they protect themselves with long terms and conditions.

Another local investor, who also requested to be left unnamed, and who started using the platform around November of last year, said he was shocked by the notification.

“Never did I expect that the greylisting of the Maltese economy could directly affect the average consumer,” he said.

Echoing the results of a survey conducted by the Malta Employers Association earlier in July, he put the blame squarely on local authorities.

“I am disgusted that the authorities allowed this to happen to our country.”

BusinessNow.mt reached out to Tastyworks for comment on 14th July, but the company has not yet responded.

The questions sent were the following:

1. Can you confirm that the order to close accounts affects all Malta-based users?
2. Can you confirm whether ‘Malta-based users’ means all users with Malta-issued identification documents, users with Malta-based bank accounts, or both?
3. Can you confirm that the decision was taken due to Malta’s inclusion on the Financial Action Task Force’s list of jurisdictions subject to increased monitoring (also known as the grey list)?
4. Can you confirm the number of accounts affected by the notice?
5. The date on which tastyworks would no longer be able to support Maltese accounts was changed from “immediately” to 20th August. Can you indicate the reason for this change?