While Octa allegedly ranks among the top financial brokers in several regions, it has some shady stories surrounding it. Despite its popularity, some aspects of the broker remain an enigma for many. Why does this controversial company use different brand names, domains and licenses for various regions? Are there many Octas, or is there only one? If there are several Octas, how do these entities relate to each other, and which one is the main one? The lack of information on the subject leads some people to believe Octa is trying to trick its clients and partners. It also causes considerable confusion, as most people don't have a clear idea of what Octa actually is as a company. This article explains the mystery behind the Octa brand.
How does Octa operate?
When people start researching Octa using open sources, they discover conflicting information about the company holding many licenses, operating under various brands and providing services in multiple jurisdictions. But why is this operational structure so complex? And which Octa is the ‘real’ one?
Brand licensing in the financial industry
The general public interested or engaged in the financial sector is under the impression that each broker’s brand represents a single legal entity across all geographies. However, for many brokers, this structure can vary since companies often engage in brand-licensing and operate under the so-called ‘brand-sharing agreements’. In many cases, these agreements deeply impact the operations and business approaches of e-brokerage firms, including retail CFD brokers.
In this context, brand licensing means that one company allows another to use its brand name, logo, or intellectual property—in other words, shares its rights on products or services. Such agreements help protect the originator brand’s reputation. They also facilitate broader brand reach, entry to new markets and the creation of new products or services.
Why are many confused about Octa?
Octa is one of many companies in the financial sector that operate in multiple regions as a group of related legal entities working under brand-sharing agreements. Within this framework, each entity obtains its own local authorisations and independently meets the requirements of local jurisdictions.
In the case of Octa, one entity (Octa Markets Inc) operates under a Saint Lucia licence; other affiliated entities are authorised in the Union of the Comoros and in Mauritius and a South African affiliate holds an FSCA licence. In the EU, Octa Markets Cyprus Ltd is authorised and regulated by the Cyprus Securities and Exchange Commission (CySEC).
Brand licensing has its limitations. While two or more companies can share the same brand, the brokerage licence can’t be transferred from one entity to another. So it’s up to each individual company to build up and maintain its legal stance.
Now, many of Octa’s clients—and the same can be said about the media—assume there is a single Octa entity that operates across all regions. This is only natural since the brand licensing process includes using similar, if not identical, marketing tactics and design for different legal entities. Each entity aims to maximize profits by leveraging the well-known brand. At the same time, each obtains its own licences and independently chooses a governance model.
Financial companies often use brand licensing
Unsurprisingly, Octa is not the only company in the financial industry that uses brand licensing. Many major players do it too, and often with good results. Below are two examples.
Binance
The largest crypto exchange in the world, Binance has dozens of associated entities in various regions. These include the unregulated global Binance.com, the segregated Binance.us and the UK-based Binance Markets Limited.
In June 2021, the UK’s Financial Conduct Authority (FCA) issued a consumer warning against Binance Markets Limited (BML), effectively banning the firm from conducting regulated activities in the UK unless it received prior written consent from the FCA. This warning, issued towards one of its brands, created a significant uproar and confusion among Binance clients worldwide. Since the media didn’t pay enough attention to the company’s umbrella structure, many clients thought that all Binance-related brands were banned simultaneously, which naturally created a backlash in the crypto community.
Huobi/HTX
In September 2023, the China-based crypto exchange Huobi announced its rebranding as HTX. After the rebranding, the company moved its headquarters from China to Singapore, and then to Seychelles. Despite these changes, the media kept referring to HTX as Huobi, overlooking the legal aspect of the firm’s transformation. This caused confusion among the clients; people were unaware of the requirements of the new jurisdictions the company was subject to. The lack of knowledge about the legal aspect of the financial sector in general and its brand-sharing element in particular created a false perception of the company’s operations and status.
Conclusion
Legal entities often present themselves under various brands depending on their needs in a particular market. In the same vein, financial brokers such as Octa diversify their legal structure and brand names while sharing intellectual property between different entities to boost market performance. On the negative side, this approach often leads to confusion, since the media are more interested in brands than the legal entities that own them.
