Exclusive: Veteran Cyprus-Based Broker Faces Serious Financial Difficulties
As the industry is still licking its wounds after some 2014 dire trading volumes, Forex Magnates has learned from several
Several different sources have reported to Forex Magnates that one of the established Cyprus forex brokers is facing substantial financial difficulties. According to people familiar with the situation, the company is struggling in terms of financing, even in its most basic day-to-day operations.
Lower trading volumes following the record low FX volatility have been a cross-industry challenge throughout 2014, not escaping the major players. Publicly listed companies such as Plus500, FXCM and GAIN Capital have all suffered troubling declines, up until the recent volume reports.
Other brokers, especially smaller market makers, were forced to shut down or sell their operations to a better managed local competitor or a large global broker. Many other brokers keep struggling and some, mainly in loosely regulated jurisdictions, are even rumored to be tapping into client deposits in order to keep funding company operations. It seems that if current market conditions prevail, quite a few more may have to either undergo some sort of restructure or completely shut down.
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Given difficult market conditions, M&A activity has recently increased: In the US, FXDD US-based accounts have been acquired by FXCM as was IBFX’s MT4 business, and about a week ago inCyprus, JFX‘s business was officially merged into Traders Trust Capital Markets, with the firm renouncing its CySEC authorization.
Forex Magnates will keep updating our readers as the situation develops.
Sad to hear but wouldn’t it be better for everyone to name the institution concerned?otherwise depositors in ALL firms are going to be nervous .
Yup. Some are sending people into space while not paying IBs, others are buying companies.
On a serious note, FM, do let us know from whom to run.
if you cant name who it is, what is the point in the story. Is it click bait?
Sorry, guys, but i think its irresponsible to put an article like this out. You could trigger a run on cyprus brokers.
Names and facts…. until then you should pull this article
@ Paul, This is the maximum information that we can provide at this time. Before publishing the article we have dedicated more-than-reasonable time and efforts to trying to present a broader picture, or rather more concrete one. However, given our strong belief in the story’s authenticity, between refraining altogether and publishing in the current form we opted for the latter, as it is our role to provide readers with whatever news we can. @ Michael about responsibility in publishing the article, I’m not sure that the very publication triggers a run on brokers more than the reality it reflects, which… Read more »
@Jonathan. Why dont you just wait until you have all the facts (or clearance from your lawyers) and then publish the full story.
Given that on another thread you have told us that you do not repeat gossip, it is a touch contradictory.
If you want it to remain a trusted journal of the industry then print the facts not gossip.
So you chose to trigger panic rather than publishing nothing.
The more i read the more you make me feel that maybe you are expressing the interests of non Cyprus based brokers.
What if i choose to say that maybe you are expressing the interests of those seen sharing the same reservation table at a club in Limassol after the FM event last May?
Would that be better than saying nothing?
i think this website may turn into the forex version of hello magazine! whats next ceo of a brokerage has had botox!
@ Jonathan Fine. then why pull the article for a while if you were so confident of it.
If a major media establishment published this about an unknown UK bank there would be outrage.
If you have evidence then publish it. if you dont then you have nothing but gossip. I really think this reflects poorly on you. I know I am no alone in this sentiment.
p.s. i do not work for a cypriot brokerage!
If this is the case and they are really are facing financial difficulties the vast majority of clients who classified as ‘retail client’ at least those in the EU, will be protected up to 20,000 Euros should the brokerage actual go under by the countries Investor Compensation Fund, correct?
Is this the same brokerage which their have been industry rumours about for the last few months?
Ed: this remains to be seen. The FSCS in the UK actually payed on many occasions, while, for example, the scheme in Austria almost never pays but rather finds excuses why it does not need to. Not sure about the Cyprus one. But, being vaguely familiar with southern bureaucracies, at the least i would expect an extremely slow process either way.
@Jonathan Fine
Great journalism forex magnates: “it is our role to provide readers with whatever news we can”
Forex magnates recently is behaving more like “the national enquirer” rather than what it proclaims to be: “a news source for the industry”
Too much pressure too produce clicks by recycling gossip? Oh yes gossip sells so go down that route my friends. You just lost another reader’s respect.
@Mark
dont hate the players, hate the game