CMC Markets, City Index Business Perseveres despite CHF Convulsion

As market participants learn of the fate and casualties surrounding some of the industry’s biggest names in FX, other players such as CMC Markets have indeed survived the dilemma despite marginal losses.

As the details emerge from each broker, it is becoming much clearer which companies were better prepared for such an event, with Alpari UK, FXCM and IG Group being the hardest hit.

Conversely, OANDA, LMAX Exchange, IC Markets, Darwinex, Pepperstone and ADS Securities have all passed with flying colors, calming investors’ nerves with statements of “business as usual”.

Business as Usual the Phrase of the Day

CMC Markets joins this growing list of firms that will live to fight another day. Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Magnates observed back in November that the group was particularly robust, fueled by mounting client applications to the tune of 30%.

According to Peter Cruddas, Chief Executive, CMC Markets, in a recent statement on the market wide upheaval, “Yesterday's unprecedented move by the Swiss National Bank created a large amount of Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in the Swiss franc and Foreign Exchange markets.

Like many of our competitors, CMC Markets sustained some losses, however, the overall impact including possible bad debts has not materially impacted the Group. The Group’s balance sheet post these events remains strong, with a regulatory capital ratio of 24% (300% pre CRD IV) and own funds in excess of £130m.

All retail client funds are fully segregated and protected. CMC Markets continues to have a strong balance sheet and business model; the Group remains on course to exceed last year’s financial performance. It’s business as usual.”

City Index No Worse for Wear

In addition to CMC Markets, City Index also appears to have avoided disaster. According to a recent statement released from City Index, “It has come to our attention that a number of retail brokerages have announced that this has resulted in them experiencing acute financial pressure.

Following this and queries from customers, we would like to take the opportunity to reassure our clients and confirm to the market that City Index has not suffered any material impact as a result of yesterday’s volatility and our financial position has not been affected. It is very much business as usual for City Index and our global client base.”