Major Retail FX Players Face Regulation, Operational Obstacles

Online trading has always been a fast paced and challenging industry to operate in and this week we have seen a number of examples of why this is still the case. Brokers have to be attractive to clients while also satisfying investors and regulators – and these competing forces don’t necessarily pull the business in the same direction at the same time.

Done Deal?

Playtech’s acquisition of AvaTrade was already being made reality when it was revealed that regulators on Monday threw a wrench in the works. The Central Bank of Ireland, where AvaTrade is regulated, sent a letter to the firm .

The reasons for opposition to the deal have not yet been revealed but there are several issues that could have concerned the regulators. Most notably is the view that a gaming company is acquiring a broker. However, Playtech seems determined to push the acquisition forward and the following day.

Ombudsman Stands Up for Traders

We are already in the last quarter of the year and IG Group has on Wednesday admitted further losses due to the ‘Black Thursday’ event that struck the industry in January. This came after the U.K. Financial Ombudsman Service decreed that the .

Clients of the company have been vocal about the fill rates at which their trades were executed, as the brokerage provided a rate of 0.9250 on the EUR/CHF pair. The rate has been much lower when compared to a number of other retail brokers who started filling client orders at rates above 1.1200.

Negative Balance

Speaking of Black Thursday losses, FXCM reported on Thursday that it still has  related to the emergency bailout that it received from Leucadia to withstand the crisis. FXCM expects to pay back the balance of their loan to Leucadia during Q1 2016, financed by additional asset sales including their shares in Fastmatch, Lucid Market and V3 Markets.

On a more positive note for the company, it was revealed on Friday that FXCM kept its leading position in terms of market share in the American market. The showed that the U.S industry is suffering but FXCM still holds over 30% of its home turf.

Losing Face

On Thursday we exclusively reported that Marshall Gittler, IronFX’s Head of Global Strategy and resident television star, . He used to be the company’s public face through his frequent appearances on major economic news networks such as Bloomberg.

Commenting to Finance Magnates exclusively, Mr. Gittler stated, ”My time at IronFX was fruitful and rewarding and I’m grateful to have had the opportunity to work for a company that strongly supports independent research. Now I’m looking forward to the next stage in my career.”

Costs Add Up

On Friday, we analysed the showing the company’s focus on growth at the expense of profits. The numbers reveal that the company has continued operating in the red for another year, this time with a loss of $878,499.

In addition to its development of new products, eToro has also committed to a sponsorship deal with football club West Ham United, which has probably cost the company a substantial investment.

Locked Fortress

Fortress Prime is looking into , we exclusively reported on Friday. For months now its clients have reported withdrawal issues and delays that the company insists are AML related, hurting Fortress Prime’s credibility.

This is a case that apparently exemplifies how regulatory demands can conflict with clients interests in ways that hurt businesses. Sources with knowledge of the matter have shared with Finance Magnates reporters that the board of the company has reiterated that all clients will be paid in full after claiming that the AML issue for the firm required a new legal framework.

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *