The line in the ground today appears to differentiate between outright catastrophe (Alpari UK, FXCM) and the ‘business as usual’ mantra, with the majority of brokers falling into the latter, including FXTM and Dukascopy Bank
Dukascopy Bank and FXTM are the two latest players to survive a brush with utter disaster this week, when the SNB decided to abolish its peg to the euro which sent FX markets into a state of utter pandemonium.
According to a recently released statement from Dukascopy Bank, “Dukascopy Group has safely passed through the CHF dramatic price shift. It was achieved thanks to advanced execution technology, careful risk management policy and reduced leverage on EURCHF till level of 1:10.”
Moreover, “The scenario of such shock had been anticipated four months in advance as shown in our news published on 3rd of October 2014: “Due to the possibility of a break of the 1.2000 floor in EUR/CHF which may see significant price gaps and cause negative equity on client accounts, Dukascopy Bank is forced to implement a maximum leverage for EURCHF exposures of 1:10 as of 12 October 2014.”
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Another broker that has evaded the CHF debacle is Forex Time (FXTM). According to an FXTM statement, “Forex Time would like to report that this unexpected turn of events has not had a major impact on the Company, as a solid risk management policy has always been in place to safeguard the Company and its clients against situations like this.
We would also like to assure clients that our capital adequacy ratio has not been affected in the least; all losses have been absorbed and our client’s funds remain protected. Any negative balances which have arisen are in the process of being corrected and business will continue as usual.
Forex Time would like to inform all clients that we are still allowing trading on CHF pairs, but only in “Close-only” mode. This means that those traders who currently hold open positions can close them, however new positions cannot be opened.”
CHF Pairs Resumed at FXOpen
While most other brokers have resumed CHF trading, FXOpen has halted all CHF crosses given the severity of the situation. According to a recently released statement from FXOpen, clients were informed that “trading on CHF crosses suspended due to radical market situation. Following SNB decision on interest rate and removal of the 1.20 floor, the Liquidity Providers introduced more rigorous trading terms, including increased margin calls.”
Earlier today, CHF pairs were temporarily halted given the rampant volatility, having since been restored to investors.