Europe Starts Countdown to New Forex Regulations

Market trading boards are seen at the Australian Securities Exchange in Sydney, Friday, February 9, 2018. ( AAP Image/Ben Rushton) NO ARCHIVING

The Aug. 1 implementation of new rules is drawing close for the European forex industry. That’s the date set by the European Securities and Markets Authority (ESMA) to sharply lower leverage on major currency pairs to 30:1 from levels that now run as high as 200:1. Minor pairs will drop even further to a margin of 20:1. The rules are expected to lower revenues at major brokers that include Saxo Bank, IG Group, IronFx, Dukascopy, Barclays Trading Hub, iForex and GAIN Capital Holdings, Inc.’s (GCAP) City Index.

Binary options will be outlawed as of that date, while contracts for difference (CFD) face new restrictions. The rules will encode negative balance protection, ensuring that forex traders don’t lose more money than their account balances if currencies go haywire like they did during the 2015 Swiss franc collapse. A new maintenance margin requirement will shut down leverage when it exceeds 50% of minimum required margin, while brokers must include a standardized warning when offering promotions.

Record Quarter for Interactive Brokers

Interactive Brokers reported record second quarter results, with accounts and customer equity hitting all-time highs. The firm ended the quarter with $134.7 billion in customer funds, a 29% increase compared with the second quarter of 2017. Client accounts grew by 27%, lifting to more than 542,000 worldwide, while quarterly revenues increased by 23% to $445 million. The broker advised that it is making heavy investments in client services, software development and regulatory compliance.

Forex account holders worldwide can trade dozens of currency pairs and a broad variety of CME currency futures through Interactive Brokers’ proprietary Trader’s Workstation (TWS). The broker has no direct cryptocurrency trading capacity but offers CME and CBOE bitcoin futures contracts, while traders with European access can also speculate on the Swedish Stock Exchange’s (SFB) Bitcoin Tracker One ETN (BITCOIN-XBT.ST).

[Investopedia’s  forex broker reviews can help you find a reliable broker for your currency trades.]

Non-Brokerage Platform Launched by TradeStation

TradeStation has launched the subscription-based TradeStation Analytics, allowing traders and institutions to access to the award-winning platform without opening a brokerage account. A rich feature set includes market data, backtesting, charting with custom indicator creation and premium analysis tools. The subscription includes access to mobile and web versions, as well as the standalone software. It isn’t cheap by industry standards, with non-professional pricing starting at $249.95 per month. 

Pepperstone Named Best Broker in Australia

Benzinga has named Pepperstone as Australia’s best broker, while FXCM won the automated trading strategies category and Forex.Com took the honors in the range of trading options category. Pepperstone also beat the competition in the customer service, value, spreads and fund withdrawal options categories. Pepperstone has received many awards in recent years, including a number one rating in six categories in the prestigious Investment Trends survey. Australia and New Zealand forex trading continues to grow by leaps and bounds, with over 400,000 account holders in 2017.

FXCM Accused of Withholding Documents

Bankruptcy proceedings for FXCM’s former parent Global Brokerage continue more than a year after the CFTC permanently banned the company from U.S. operations in retaliation for taking positions against customers. The company is now accused of withholding legal documents that shed light on a January 2015 Leucadia loan that kept the troubled broker above water. The release of nearly 2,000 documents is being contested as violating attorney-client privilege. FXCM continues to do business in the United Kingdom and Australia, with Leucadia now the majority owner.

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