FXCM Adopts Retail FX Accounts From Alpari US

FXCM announced that it will be assuming the retail client accounts of Alpari US, in a notification issued today. The listed firm was chosen by Alpari US, as it exits the retail FX arena in the United States.

Alpari US has revealed that the 27th of September, the last Friday of the month, as its departure date. FXCM will take over client accounts from the specified date.

Alpari US issued a statement earlier today, providing further details of the reason the company was pulling out of the US market. The statement came after the news release issued by 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 Magnates about the move. In addition, the firm sent out an email to all of its clients, providing details about the withdrawal, and also contained specific questions and answers that could be raised by clients.

One of the most important questions for current clients was answered in the email.

"What will happen to my open positions? Alpari will not transfer open positions to FXCM. All open positions will be liquidated, and all pending orders will be cancelled at close of business at 5:00PM ET on Friday, September 27, 2013. Alpari recommends that you manage all your positions prior to this date. However, FXCM intends to re-establish the positions liquidated by Alpari. Please note, that the re-establishment of positions is limited to positions liquidated by Alpari, and does not include positions manually liquidated by clients, between the time of this notification and the close of business at 5:00PM ET on Friday, September 27, 2013. Additionally, FXCM will only be able to re-establish positions offered by both Alpari and FXCM."

The US FX brokerage space has been systematically declining over the last three years since the implemetation of the new rules, which have affected Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term, capital adequacy and order types. Once a flourishing industry, the US FX brokerage sector was home to the world's largest providers. The regulatory changes have had a negative impact, with a flurry of brokers packing their bags. Alpari US follows in the shadows of FX Solutions, Easy Forex, Forex Club and GFT.

The new rulings are thought to be positive for the market. However, when assessing their impact on traders, the results are quite the opposite. The reduction in the number of brokers from whom traders can choose, means that there will be little or no competition, in addition, brokers will not have the need nor desire to innovate and introduce new trading solutions. Only regulated firms in the USA are allowed to solicit US clients. Therefore, US clients will lose out.

Capital adequacy requirements for FX brokers in the US are extraordinarily high, when compared to other major regulators. In the UK, firms need to hold a minimum of seven hundred and thirty thousand Euros. In Singapore firms are obliged to hold one million Singapore dollars.

The $20 million bounty set by the US regulator, has been one of the major factors that has been drowning the FX markets in USA.

Turkey's financial regulator, SPK, issued a circular specifying that it intends to increase capital requirements for brokers. Unlike other regulators, the SPK is following the direction of the NFA.

Financial terms of the transaction between FXCM and Alpari US have not been disclosed.