Alpari to Cut Client Positions on Five Currency Pairs From 21st March

The retail brokerage will firstly close trading for several currencies and then delete all of the active and pending positions.

Alpari Limited today announced the suspension of trading in selected currency pairs. The decision shall enter into force on March 21, 2016. From that moment the brokerage’s clients will not be able to open new positions, but only close already active ones. The company will halt all the positions in the selected instruments and delete pending orders on March 31, 2016.

The amendments concern of course less popular pairs, containing currencies commonly referred to as exotic. According to the official information issued by Alpari, it will not be possible to trade AUD/SGD, CHF/SGD, HKD/JPY, SGD/JPY and USD/HKD from the second half of March. As the instruments list shows those changes affect only currency pairs including Singapore dollar (SGD) and Hong Kong dollar (HKD).

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The press release did not contain any information why the retail foreign exchange broker made such a decision. In the case of HKD however, there were some fears that the currency threshold maintained for almost 30 years will eventually be removed, which might bring a repeat of CHF anomalies observed in January 2015. That time the Swiss National Bank (SNB) decided to abandon its own peg leading to bankruptcy or worsening liquidity conditions for several financial companies. Having learnt from previous experiences brokers are trying to defend themselves against a similar scenario.

FXCM undertook similar steps less than a month ago. As Finance Magnates reported, the US headquartered online forex brokerage, decided to liquidate all open USD/HKD positions on February 26, 2016. The company claimed that there iss a chance of highly illiquid conditions and disruption on the USD/HKD currency pair and closed trading to mitigate potential losses to its customers.

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