During the passing week much of the major news in the online trading industry involved the actions of regulators in different markets around the world. Regulatory stories came from Turkey, Cyprus, France, Belize and the US while we also saw markets open up and continue to develop in the Far East.
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Fine and settled
On Monday Finance Magnates reported that FXCM took a step towards resolving another legal issue in the US, which it is already leaving, by agreeing to pay a $650,000 civil fine to the CFTC. The CFTC alleged that FXCM was required to maintain adjusted net capital of $25 million on January 15, 2015. However, on that particular day FXCM admitted that it had a shortfall of at least $200 million under its adjusted net capital requirement, due to the SNB black swan event.
And in Cyprus this week, Novox Capital had to pay a €175,000 fine, with CySEC citing multiple violations that caused it to initiate the administrative action. The biggest count on which the brokerage was fined amounted to €70,000 for providing investment advice and portfolio management services without having the appropriate authorization.
Start of a Turkish Exodus?
On Tuesday publicly listed Polish trading firm X-Trade Brokers (WSE:XTB) notified investors about the possible downsizing of its operations in the Turkish market. This was done after an analysis by the brokerage on the impact of recent regulatory changes in Turkey, which include a very high minimum deposit of TRY 50,000 (about $13,500) and a very low maximum leverage of 1:10.
The local industry is already up in arms over the issue. They have organized a petition protesting to the regulators that the limitations might push Turkish traders to unregulated offshore operations, exposing them to risks and avoiding the regulations that are meant to protect them all together.
On Wednesday Finance Magnates exclusively reported on two countries where new regulations are beginning to be enforced.
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In Belize, the IFSC started to demand that brokers prove they adhere to its increased annual license fee, and to the capital requirement now set at $500,000.
In France, the AMF has begun ordering brokers and affiliates to take down their ad campaigns to comply with its ban on electronic advertising.
In addition to the enforcement actions, we also saw this week that CySEC is planning a number of mandatory changes to the operations of binary options firms in Cyprus. One of these proposed reforms includes the banning of sub-5 minute trades.
On Thursday Finance Magnates revealed that the Securities and Exchange Commission of Cambodia (SECC) has recently issued its first Derivative Broker (DB). Golden FX Link is the first ever Cambodian broker to get an official license to operate in the country.
The firm has to adhere to substantial capital requirements in order to operate as a market maker. As a central counterparty, Golden FX Link parks $5 million at the National Bank of Cambodia and another $250,000 for its derivatives broker license.
CNY Quotes Streaming
On Friday we reported that one of the leading Chinese banks, the Industrial and Commercial Bank of China (ICBC), is taking a big step in changing liquidity conditions on the Chinese yuan market. The institution, which is the largest bank in the world by market cap and total assets, is committing to substantially facilitate trading on CNY (Chinese yuan or renminbi).
ICBC is the first Chinese bank to continuously stream Chinese yuan quotes to the market via FXall and Electronic Trading. Both trading platforms are owned and operated by Thomson Reuters.