A few days ago an interview with GFT’s CEO Gary Tilkin appeared on the GFT company’s website. The content was standard: we comply with the NFA’s new requirements but what was interesting to me in particular were a few lines that raised a handful of question marks. Gary claims that GFT’s technology was FIFO compliant in the first place and that he completely agreed with the new guidelines and thinks they are making Forex trading more fair.
What I noticed was his statements regarding “that many traders don’t understand that the practice works against them far more often than it works for them.” and that “GFT has never allowed hedging on its system because we believe it’s little more than a way for dealers to charge twice for the spread on what is, essentially, a non-position”
Sounds vaguely familiar? That’s because this is exactly what the NFA stated in its document which announced the upcoming FIFO requirements:
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“NFA is concerned that customers employing this strategy do not understand either the lack of economic benefit or the financial costs involved.” and that “it increases the customer’s financial costs in several ways. One way it increases costs is by doubling the expense of entering and exiting the transactions.”
So the chicken and the egg question is whether GFT’s marketing team copied from NFA’s press release or whether NFA quoted a certain executive in its reasoning for the decision?
If the latter is correct then this is one of the smartest business moves I’ve seen lately because it forced a lot of competitors to fork out a lot of dollars in order to get their platforms right or shift their clients to overseas subsidiaries.
Gain yesterday announced that it doesn’t need to change anything with its software so it’s one more broker to point the finger at…