As was already reported yesterday by my forex colleagues ACM, one of Switzerland’s only three brokers, was denied a banking license by FINMA. Ultimately this means that, unless the decision for some reason is overturned, ACM will soon have to stop it’s forex business in Switzerland all together. The only two fully licenses Swiss brokers now are Dukascopy and MIG.
If so, it’s probably good news for the forex industry, especially in Europe where only a hanful of large decent brokers are left. ACM was no less than a controversial broker with long history of problematic activities: the police raided its offices a year and half ago seizing documents and computers following a big lawsuit by a Mexican client who claims he was mistreated and subsequently loss over $1 million, and then an ugly internal management and shareholders power struggle ensued where the founder CEO Lloyd La Marca was ousted from his seat and left the company completely. And these are just the things we publicly know.
ACM has immediately moved to contest FINMA’s decision for three reasons:
- buy time while they work to improve whatever they need to improve according to FINMA, although chances of success are less than slim now
- continue operation for at least 6 to 9 months according the Federal Administrative Court rule which says that as long as the appeal is being discussed ACM may operate without obstruction
- start preparing an alternative route – for instance move to Cyprus like most Swiss brokers already did
It remains to be seen what will happen in the coming months however I think it’s a safe bet that ACM will lose its appeal and will either sell out to Dukascopy/MIG or move offshore.
Update: ACM’s statement regarding this post:
ACM, Advanced Currency Markets, is still undergoing the process to become a Swiss bank.
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Recent press articles surrounding ACM’s status have evoked events that took place several months ago. Following FINMA’s preliminary review as of December 2009, ACM was found not to satisfy all the requirements for Swiss bank status due in part to impediments arising from ACM’s cross-continental and cross-jurisdictional, global presence.
Since that time, the firm has effectively adhered to all banking regulation required by FINMA and its activities continue without restriction.
ACM has and continues to work closely with the regulator and has taken all necessary measures to resolve outstanding issues. An independent 2010 audit confirmed that the firm fully complies and fulfills all necessary requirements – be they structural, organization or financial – for its banking license.
ACM is confident in the positive resolution of this case and optimistic about the company’s future. In the interim, the largest retail Forex broker in Europe continues normal business operations and trading.
ACM recently launched a new Web-based trading system as well as added several new features to its revamped homepage.