AxiCorp partners with ILQ to offer its trading services to US clients
AxiCorp, one of the more established and the largest Australian brokers (dba AxiTrader), is entering the US forex market through
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.
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I dont know, in my opinion, these ILQ people are questionable. A former principal, then client, was sentenced to 30 yrs prision in Florida for a multimillion $ ponzi scheme. And now this business with ATC (see NFA complaint). My money wont go anywhere near these guys.
atc/nfa minor stuff
Not in my opinion, for both firms. Altho it appears no clients were harmed directly. ILQ was clearly deceiving NFA, by changing to unapproved counterparties right after the audit – and they knew they were not allowed to do that. Begs the question, what else will they do they know they are not allwed to? ATC or its principal was apparantly betting against its own clients (which seems to be a good bet in retail fx most of the time), while clearly stating the opposite on their website and also knowing it was illegal. Which begs the question, what else… Read more »
“atc/nfa minor stuff” Nothing big? ATC holds themselves out as a no dealing desk brokerage – which is true if they introduce to FXCM. When introducing to ILQ however, it certainly isn’t a no dealing desk environment. That’s the first issue. Now, the second major issue is most introducing brokers are compensated by volume of their clients’ trades regardless of the partner broker. In ATC via ILQ’s situation the NFA alleges ATC was also profiting off of client losses. It’s one thing for a broker who runs a desk to do so and their clients are aware they’re running a… Read more »
I am not familiar with the ATC situation but if was like the ILQ issue then I would agree with Michael and say it is minor. The ultimate result/verdict for the ILQ complaint was nothing close to what the NFA was insinuating. Though the ILQ complaint stood out to me as one of the worst I have seen the ultimate result was far different than the tone of the NFA statement. This is not the first time that the NFA slandered a company in a complaint, and I am surprised that ILQ didn’t go after them for defamation of character… Read more »
sorry to break this to you: everybody in the market, including many “STP/ECN” and even “Prime Brokers” are doing that. it may be unethical and ‘unfair’ but it’s not illegal
when saying minor the intention was to say that these cases differ from those of gain/fxcm/fxdd where asymmetric slippage was involved – which was completely against the clients
^^ Well said Michael.
can someone point me to the ATC debacle regarding trading against clients?