Dodd-Frank Rollback, US Forex Funds and Staff in Cyprus

The past week was full of novelties for the financial intermediary markets.

Several important news items hit the wires last week, with Donald Trump once again at the forefront of financial industry news. While the process of unwinding some aspects of Dodd-Frank is ongoing, a Bitcoin proponent has been appointed as Budget Chief. Here is a recap of the most interesting news stories from the past week.

Bitcoin Advocate to be Trump’s Budget Chief

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Tea Party Republican Mick Mulvaney, a fiscal hawk, has been confirmed as Trump’s budget chief with the aim of constraining social programs. The news is also a great boost to the US fintech sector as the new Director of Office of Management and Budget strongly supports blockchain and cryptocurrencies. In response, Bitcoin closed the week above $1000 once again.

Mulvaney is also an advocate of Coin Center, which is a non-profit research and advocacy center that aims to solve public policy issues that are facing cryptocurrency technologies. The group raised over $1 million in the autumn of 2016.

Dodd-Frank Rollback on its Way

President Trump began a regulatory overhaul of the US financial system that aims to bring back access to credit for small and medium sized enterprises. The Donald’s administration is starting to deliver on its promises quickly and is taking advantage of provisions that do not require congressional approval.

Broker-dealers and financial advisors have also been helped by the new administration’s extension of the ‘fiduciary rule’ that has been delayed 180 days. The ‘Volcker Rule’ which limits banks from making speculative bets on market moves may also come under review. Trump’s executive action also requires the still unconfirmed Secretary of the Treasury to review Dodd-Frank.

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CySEC Orders Staff Reviews

The Cyprus Securities and Exchange Commission has ordered companies from the brokerage industry that are operating on the island to take steps to monitor their employees. Required staff skill sets are now more diligently defined and regular competence checks have become mandatory.

There were also changes concerning marketing and sales staff that are directly involved in the creation of advertising content and the handling customer service enquiries. CySEC also discourages the adoption of aggressive sales tactics and the offshoring of operations outside of the European Union.

US Retail Forex Deposits Finish 2016 at $525m

The volatility surrounding the US presidential election has not managed to cause enough of a spur to FX trading appetites in the US. Sweeping regulatory changes by the Dodd-Frank act continue to apply pressure on the industry with only a handful of retail foreign exchange dealers remaining in the market.

The annual decline amounted to 3.5 percent, which is higher than the contraction throughout 2015, but much slower when compared to 2014’s 8 percent decline. The hopes of the industry are pinned on the overhaul of Dodd-Frank that could come in the next couple of years, provided that Congress moves forward with the big regulatory overhaul.

Binary Options Brokers Filtering Affiliate Traffic

European regulators are paying close attention to the ways in which brokers are attracting clients. The heavily scrutinized binary options industry is taking measures to limit ‘toxic traffic’ from lists of affiliate partners. Affiliates have been selling unrealistic expectations to prospective binary options traders for years.

The changes are welcomed by the regulated binary options industry which is aiming to operate strictly within the EU regulatory framework. Increased monitoring of traffic for regulated companies is essential for this business to survive.

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