AxiCorp, one of the more established and the largest Australian brokers (dba AxiTrader), is entering the US forex market through a partnership with Institutional Liquidity (ILQ).
Since becoming an independent forex broker in the US is extremely costly (over $20m in starting capitalization alone) and cumbersome (FIFO, cap on leverage, etc) it doesn’t make much sense for any new broker to enter this market via the full license (RFED). CFTC is aggressively going after foreign brokers accepting US clients however many of them still receive US traffic and would like to capitalize on it. One of the first foreign brokers to monetize its US clientele, without exposing itself to the NFA, was eToro through partnership with FX Solutions.
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Lately AxiCorp registered as IB in the US and became a Guaranteed IB for ILQ thus paving way to referring US traders to ILQ and get compensated for that. The only other alternative would be to just refuse opening accounts for US traders – which is a loss of business.
ILQ is an exceptionally interesting broker as it was not only the latest to enter the US forex market but it also doesn’t solicit clients directly and is only operating through IB and WL partnerships. Apparently this business model works as ILQ is one of the fastest growing forex brokers in the US, growing 35% in July 2012 alone.
ILQ will provide a unique feed for AxiCorp’s clients meaning its US traders will enjoy the same quality of service Australian clients are already benefiting from.