Traders desiring an unregulated broker, but backed by a major financial firm are now in luck with the launch of FXCM Markets, an unregulated subsidiary of FXCM. The new entity marks a change for FXCM as its existing subsidiaries such as FXCM UK, Japan, Germany, and Australia are all regulated in their respected regions. Also in contrast to existing businesses, FXCM Markets will be offering products that are unavailable at the regulated entities such as 400:1 leverage and interest bearing accounts. The interest accounts are for deposits above AUD5000.
Although the subsidiary is unregulated, FXCM is marketing to customers that it is part of the greater holding company and therefore provides the same financial stability. In addition, clients will be subjected to the same ‘Know Your Customer’ (KYC) and Anti Money Laundering (AML) polices of the regulated divisions. FXCM Markets is only available to customers from regions where FXCM doesn’t operate a regulated entity. Therefore, traders from the US, Canada, UK, France, Germany, Australia, and Japan are unable to open accounts with FXCM Markets.
So who would be interested in opening an account with FXCM Markets? Our view is that the launch of the entity is being driven by requests from IB/WL partners that are seeking the benefits that an unregulated off-shore entity can provide their clients. In addition, by marketing the availability of interest bearing accounts, it shows that FXCM Markets is targeting larger size clients. Specifically, with customers from Russia and China being able to open accounts, it opens the door for FXCM Markets to attract business from two large and growing regions.
Along with the brokers return to offering dealing desk accounts, the launch of FXCM Markets shows that FXCM is searching for methods to leverage their name in retail forex as they target new markets.
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Explaining the decision to launch FXCM Markets, Jaclyn Klein Vice President, Corporate Communications at FXCM stated:
FXCM Markets, www.fxcmmarkets.com , was established in part as a solution to bring more competitive products and promotions to our global client base. FXCM’s various entities have specific requirements regarding available product offerings, margin, and order execution logic. Consequently, over time FXCM’s websites have become focused to cater to a specific region. For example www.fxcm.com (FXCM LLC) is an offering that is most applicable to US residents, whereas www.fxcm.co.uk (FXCM LTD) is an offering that is most applicable to UK and Ireland residents. The launch of FXCM Markets allows FXCM to offer a larger group of its clients a more complete suite of products and services.
FXCM Markets provides unique account features that may not be offered at other FXCM entities. Presently FXCM Markets offers 400:1 default leverage for all forex trading accounts unlike other entities where default leverage offerings are 200:1 or 50:1 depending upon the jurisdiction*. FXCM Markets also offers Interest Bearing Accounts for deposits as low as $5,000 AUD which is unique to any entity at FXCM. FXCM Markets has other frequently requested promotions and product offerings on schedule for subsequent quarters that may only be offered to FXCM Markets customers.
FXCM Markets is a separate, unregulated entity from all other FXCM entities yet still a part of FXCM Holdings. By not being a regulated entity, FXCM Markets offers strategic advantages to both the company and account holder. From a brokerage perspective, the current regulatory environment is one of the most expensive and strictest ever with noticeable effects on various brokerages just over the past few years. From a customer’s perspective, trading with an unregulated broker may help a trader avoid being affected by any future regulatory changes that affect an individual trading style or strategy. Customers with FXCM Markets would therein be unaffected by future regulations and be able to rely on FXCM’s financial stability as shown in its publicly accessible financial reports.
It may be part of FXCM’s holding company, but will clients feel the same safety as they do with the regulated group? Let us know what you think in the comments