One Massive Valuation and a Regulatory Shakeup in Cyprus

FX Trade Financial, State Street, ACFX, EBS, XTB and IronFX are among the firms that appeared in last week's top

During the passing week the most interesting news from the online trading industry included stories from around the world like an upcoming IPO in Poland, a broker’s milestone in Japan and an important deal in the US.

WM/Reuters FX Benchmark

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On Monday Thomson Reuters reported its acquisition of the WM/Reuters FX Benchmark rate calculation subsidiary, The World Markets Company (WM), from State Street Corporation. The benchmark is widely used as a price reference for portfolio valuation and performance and index calculation as well as to price related foreign exchange contracts.

Tobias Sproehnle, head of Benchmarks at Thomson Reuters, said: “We are excited about the addition of this essential service to our growing number of industry benchmarks and indices. The FX market continues to evolve and grow in complexity, so it is increasingly important that FX benchmarks are reliable, transparent and independent. As the trusted, independent provider of critical data to power the world’s financial markets, we are committed to ensuring that this benchmark continues to meet the needs of its many clients.”

$618 Million IPO?

On Tuesday Polish-based X-Trade Brokers (XTB) announced its intention to hold a public offering of shares in the second quarter of 2016 and an introduction to trading on the Warsaw Stock Exchange.

Bookrunners have valued XTB at 1.8-2.3 billion zlotys ($484 – $618.4 million), pegging its pending initial public offer in Warsaw at up to 330 million zlotys. The valuation marks it as the biggest IPO in Warsaw since May last year.

Japanese Breakthrough

On Wednesday one of the fastest growing Japanese brokerages, FX Trade Financial, reported that as of the end of March it has reached a milestone in the handling of MetaTrader 4 accounts. The firm reported that it surpassed 50,000 MT4 accounts in the first quarter of 2016.

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FX Trade Financial is actually actively targeting its traders to make a switch from its proprietary trading platform to MT4 with a set of incentives. Traders are enticed with a chance to win a bitcoin and with a cash back rebates program that is returning commission to the company’s clients depending on their monthly volume. Other incentives include lower spreads on major currency pairs traded in Japan.

EBS White Label

On Thursday Finance Magnates exclusively reported that ICAP’s electronic trading business EBS BrokerTec has suspended the development of its white label product for foreign exchange trading. The project has been suspended after almost 2 years in the works.

Back in 2014, EBS hired industry veteran Paul Allmark from Thomson Reuters to lead the development of the product. Sources familiar with the matter shared with Finance Magnates that the white label product had not been planned to become part of the core offering of ICAP’s electronic business.

Cyprus Shakeup

On Friday we reported on a series of revisions from the Central Bank of Cyprus aimed at enhancing transparency among the financial institutions that it oversees. In a memo addressed to all AML officers was a list of new clauses that introduce enhanced requirements for certain financial institutions, such as the need to meet clients in person and conduct face-to-face meetings with regard to KYC, AML and anti-terrorist financing.

In other news out of Cyprus during the week, CySec has suspended the license of ACFX over alleged violations on a number of counts including the “non-compliance with continuity and regularity in the performance of investment services”. The charge is most likely related to clients of the brokerage claiming that ACFX has increased the overnight interest rates on oil contracts drastically and charged interest rates on their positions in retrospect.

A senior politician in Cyprus, Andros Kyprianou, questioned why the license of IronFX hasn’t been suspended by CySec as well. He sent a letter to Mrs. Dimitra Kalogerou, CySec Chair, that compared how IronFX had not seen the same treatment against it over similar matters that were noted against the CIF Pegase Capital.

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