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.