Market regulators have enormous power to change the way clients and brokers operate in their respective jurisdictions. While many do not understand how online FX trading works and usually ignore real issues, some regulators take a proactive approach. The most popular stories this week provided a number of examples of how authorities can shape the industry.
MB Trading Drops NFA License
On Monday, California-based broker MB Trading notified its clients that the company will be consolidating its forex trading operations under its new owner, TradeKing Forex. This is another step in the consolidation of the U.S market as MB Trading is dropping its NFA license.
Before this move MB Trading was the seventh largest forex broker in the U.S with a 3.3% market share. Now that segment will go to one of the largest players with TradeKing’s forex division being an introducing broker to GAIN Capital’s FOREX.Com brand.
ACM Gold’s License Reinstated
On Tuesday, the South African regulator, the Financial Services Board (FSB), reinstated the trading licence of ACM Gold and Forex Trading which was suspended after a number of its clients and introducing brokers came under scrutiny.
Irfan Pardesi, the Chairman of ACM Gold commented to Finance Magnates, “It has been an interesting ride over the last few weeks…It was such an amazing learning curve for our new CEO Dano Fotiadis since the event unfolded within ten days of him assuming the position…”
Pure Markets' CEO Talks Business Model, 2020 OutlookGo to article >>
SunGard’s Expanding Infrastructure
On Wednesday, it was reported that SunGard will be providing back-office support for Exness amidst a period of global expansion for the broker. In addition, SunGard’s solutions will provide Exness with automation, multi-asset-class capabilities, and scalable infrastructure.
It has also been announced that Saxo Bank has chosen SunGard IntelliMatch Cash and Liquidity Monitor to automate intraday liquidity monitoring for external accounts, reporting and forecasting processes. It is designed to help capitalize on cash surpluses, minimize penalties on shortfalls and optimize the distribution of funds for higher returns.
NZGFT’s Australian License Revoked
On Thursday, the Australian Securities and Investments Commission (ASIC) cancelled the financial service licence (AFSL) of LSG Group, following an investigation. Among the findings is that the firm made deceptive representations on its websites concerning products it offered.
Additionally found by ASIC is that the brokerage failed to do all things necessary to conduct financial services in an efficient, honest and fair manner in relation to a deposit of US$100,000 received from an overseas client.
Dubai’s New Retail License
On Friday, Finance Magnates exclusively reported about IG Group obtaining a retail license from the Dubai Financial Services Authority (DFSA). The license allows the company to market across the UAE and onboard clients through its local subsidiary with a maximum leverage of 1:20.
What stands out with the new license is that up until now, this type of registration has specifically addressed the targeting of retail clients, which hasn’t existed up until recently. IG Group waited out until it was in place to establish its foothold in the region.