ESMA Restrictions Hit FxPro UK's 2019 Revenue

Online 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 broker FxPro UK has reported its annual numbers for 2019, showing a 59 percent decline in its revenue, along with a net loss of £221,724 (around $273,312).

Till December 31, 2019, the brokerage recorded £1.54 million ($1.90 million) in total annual revenue, compared to £3.76 million ($4.64 million) the previous year - a year-on-year decline of almost 59 percent. The company was also profitable a year before with a net profit of £1.24 million ($1.53 million).

The sluggish figures followed the declining notional volume traded on the platform that reached $55 billion in 2019, almost one-third of the reported $142 billion in the previous year.

The attack of the European regulator on brokers

The FxPro UK subsidiary highlighted that the decrease in the volume of trading and the resulting poor revenue is due to the measures imposed by the European Securities Market Authority (ESMA), which include the restrictions on marketing and the distribution of CFDs to retail investors.

The impressive 2018 numbers of the broker were also hit by the week market conditions.

Due to the loss incurred in the year, the company’s net asset also £4.1 million ($5.05 million) while the figures for the previous year stood at £4.32 million ($5.33 million) - the company still has a total asset of £5.1 million ($6.29 million).

The cash and cash equivalencies of the company also decreased to £3.69 million ($4.55 million) last year - this was at £4.6 million ($5.67 million) in 2018.

The online brokerage also highlighted that its total expanse also reduced 23 percent primarily due to the decrease in staff costs and commissions to introducing brokers.

The disappointing figures from the company came after posting record figures for the previous couple of years.

Despite the worse-than-expected figures for 2019, the COVID-19 induced 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 of Q1 saw many brokers experience post record numbers. With Q1 2020 results yet to be published by FXPro UK, we should expect an uptick in performance.

Earlier this year, the UK regulator warned the traders against a similarly named clone of FxPro.