Brokers Flock to Paradise of Sun, Sand and ‘Unlimited’ Leverage

Among the plush hotels and pristine beaches, the coral reefs and rainforests, a very different kind of paradise has emerged on the famed tropical islands of the Seychelles: a dream environment for online trading firms.

The Indian Ocean archipelago has found itself at the heart of a financial offshoring boom, as web-based brokerages flock to Africa's smallest nation for its low taxes, lax rules on staffing, and — most importantly — permissive stance toward offering high-risk trading strategies. With many other jurisdictions clamping down on how much brokers can lend to retail investors to amplify their bets, the number of securities dealers registered in the Seychelles has tripled to more than 220 in about five years.