During the passing week the most interesting stories from the online trading world included many new technologies as well as reports on how regulators around the world are trying to change the way business is done.
The absolute biggest story during the week was of course Donald Trump winning the US presidential elections for which we examined the effects on the markets.
On Monday we reported that the Israeli Security Authority (ISA) has granted its sixth Trading Arena Licence to Colmex. Now only two more Israeli trading firms are still in limbo (PROTRADE and Trade Capital Markets Ltd) waiting for the final decision of the ISA to approve or reject them.
A few days later, after reports that ISA investigators had raided the offices of iTrader, Finance Magnates obtained court documents shedding more light on the case. Seven executives of iTrader Israel, including its owner, have been arrested and they are now released on bail, forbidden from leaving the country. The official suspicions are that iTrader Israel offered unlicensed portfolio management services between May 2013 and May 2016, and fraud under serious conditions.
Later in the week the news broke that the US Securities and Exchange Commission (SEC) has ordered EZTD Inc. to pay more than $1.7 million for misleading investors into trading binary options online, according to an SEC filing. EZTD Inc. manages the three brands, EZTrader.com, EZinvest.com, and EZInvest-sec.jp.
Australia Shake Up
On Tuesday we reported that the Australian Minister for Revenue and Financial Services, Hon Kelly O’Dwyer, communicated that the Australian government is proceeding with reforms to the retail over-the-counter foreign exchange and CFDs sector that is going to dramatically impact the local industry.
The reforms, which the government says are designed to protect clients, could cause operational difficulties for a number of companies in the country. The companies that are holding a regulatory license from the Australian Securities and Investments Commission (ASIC) will no longer be able to use client money “for a wide range of purposes, including for working capital”.
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On Wednesday the news broke that the French Parliament has voted to ratify the ‘Sapin 2’ bill that is aiming to hand certain powers to the French Ministry of Finance in order to limit the advertisement of risky products.
The French regulatory authority intends to limit the leverage on forex and CFDs trading. For the industry, the key aspect of the decision of the Autorité des Marchés Financiers is at what level retail traders in France will be capped. The first stance of the AMF was that it could limit the margin requirement to a minimum of 20% or 1:5.
Wealth of Technologies
A number of new tools for the industry were revealed during the week.
ThinkLiquidity, a provider of risk management services and liquidity solutions, has deployed QuantView, a new web application utility that helps delivers metrics and analysis regarding trades over electronic trading platforms.
Tradency, best known for inventing the Mirror Trading concept in 2005, has launched a new contracts-for-difference (CFD) robo-advisory services, named Smart Investor CFD, helping strengthen retention capabilities for brokers. The service will also aim to lengthen existing clients’ lifespans, helping mitigate the churn levels and outgoing clients. Tradency also introduced the newest version of their CRM offering, Sherpa.
eToro, one of the leading social trading networks, has unveiled its CopyFunds service, using machine learning offering to help advance and offer algo-funds for investors. The service is specifically targeting a group of individuals that address future trading, i.e. millennials. Recent studies have shown the reliance that these traders place on social trading strategies, making the initiative a very conducive option for this demographic.
Australian fintech firm TRAction has launched its trade reporting and monitoring services for CFD and FX brokers in the UK and Europe in a bid to help them with meet reporting requirements under the EMIR and MiFID legislation. The newly-launched services will also simplify the trade reporting process for those operating in multiple jurisdictions.
Alpha, a UK-based provider of foreign exchange (FX) and contracts-for-difference (CFD) products, has unveiled a new OMS and market-making engine, helping automate large orders independently of trading desks. The CEO of Alpha, Muhammad Rasoul, said: “The algos run in real time and are incorporating new market information, price, and size tick by tick. We don’t disclose the actual Algo details, but we are happy with the work that has been done and delivered by our development teams. It’s very rewarding now for our Trading and Risk teams to see this in action.”