FXCM Repositions Its Strategy for Japan's CFD Market

Leading multi-asset trading provider of financial derivatives, FXCM, has made significant changes to its Japanese division. FXCM Japan Securities Co, a Japanese regulated financial services firm, reported that it has altered its offerings to retail investors. The firm reported to its clients that it will no longer be servicing retail investors for CFD trading.

FXCM Japan informed its traders on the 29th of September of the changes, details in the notification stating that the brokerage firm will not accept any new retail clients for its CFD product range. The applies to clients classified as retail, however the service will continue for professional traders.

FXCM launched its global CFD offering in 2009, over the years the firm has enhanced its offering to include new instruments and product types, earlier this year it began offering smaller trade sizes, micro-CFDs.

The firm’s CEO, Drew Niv, pictured, commented about the broker’s CFD strategy earlier in the year, saying: “FXCM will be working this year to make our CFD offering more unique and competitive and this is one of the first steps.”

The latest changes come as FXCM Japan streamlines its operations. Under Japanese financial rules, retail investors are required to have separate accounts for FX, Commodities and indices. After reviewing its retail CFD business, it would appear that FXCM decided to evolve its strategy to focus on professional traders.

A company spokesperson commented to Forex Magnates about the changes: “This is part of an effort to streamline operations in Japan.”

FXCM’s Japanese entity has been an active player in the world’s most established market for retail currency trading. In 2011, the firm made a number of key acquisitions to strengthen its position in the Japanese market. It acquired GCI Capital CO.LTD for $5 million (net of cash); GCI Capital was reported to have a client base of 17,000 with $110 million in client equity. Furthermore, FXCM acquired Foreland Forex for $17 million, in the same year.

Apart from its retail offering, the firm has been enhancing its institutional solution, the firm’s ECN, FastMatch, has extended its global reach with the launch of its matching engine in Tokyo’s IBX Data Centre.

Japan’s retail FX environment has changed significantly after the regulator made crucial changes to leverage rules, however in 2013 a number of domestic brokers benefited from Volatility in the FX markets and saw total trading volumes for the month cross the formidable one trillion dollar mark.