FxPro Shuts Down Australian Office (Updated)
(Update: article updated with statement from FxPro below)
Consolidation and refocusing in the forex market continues with FxPro today shutting down the Australian office, opened only year and a half ago. Clients clicking on opening live account button face the following message:
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FxPro has undergone quite a few changes lately with some of its minority shareholders selling to an undisclosed investment group (not a broker to the best of our knowledge), main management and shareholders remained in place however James Marshall the head of PR department is no longer with the company.
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Lately, major companies like OANDA, Saxo Bank, GFT, MB Trading and others have consolidated global offices and let go of employees trying to cope with slowdown in business and volumes witnessed through 2012. 2013 however brought much needed optimism into the market as most brokers reported peak volumes in January and are witnessing similar (though a bit lower) numbers in February.
Following the posting of our article on Friday, FxPro provided a statement on the news:
FxPro is proud to provide superior service to its customers by combining state of the art technology and constantly improving customer service, support and user experience. Since FxPro Financial Services Ltd was established in 2006, we have been growing our clients’ portfolio and extended our customer base to over 150 countries worldwide.
Our commitment in supporting our customers and providing superior service was demonstrated by the recent change of our business model to that of an agency – no dealing desk intervention – model, effectively fully aligning our interests to those of our customers. We currently provide a 24 hour, 5 days a week support in 18 languages.
Driven by the dynamics of our new business model and our customer centric focus a decision was taken to merge the activities of the Australian subsidiary – FxPro (Australia) Pty Ltd – with those of our Cyprus and UK operations. As a result the operations of our Australian subsidiary will come to an end on 1 March 2013.
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I think this may not be the only company which will go down this route. With the NZ FSP tightening up their rules, it could be that some of the companies who had their NZ licenses revoked may look to establish in Australia. The ASIC will no doubt be aware of this and will take the appropriate decisions, meaning that Australia may become less attractive to brokers in the APAC region in future.
The ASIC capital requirements rule kicked in end of last month, i think there will be a big clean up as brokers need $500k now and $1 mill next year. http://forexmagnates.com/add-a-zer0-please-asic-wants-more-net-capital/
James,
Its True the Currensee Team was let go but the North American Sales team is in tact and expanding,
James,
Its True the Currensee Team was let go but the North American Sales team is in tact and expanding,
Hi James, Your statement is not accurate. OANDA did not terminate the entire Currensee team (who have been OANDA employees since the acquisition), nor our US sales operation, nor will the San Francisco office be made up of solely executive staff. In fact, several employees from across disciplines and North American cities, most of whom are not executive management, are re-locating to San Francisco. In addition, OANDA will further be able to recruit from the talent pool in San Francisco, as well as retain its top talent with unique career opportunities. Founded as a company that leverages technology to disrupt… Read more »
Hi James, Your statement is not accurate. OANDA did not terminate the entire Currensee team (who have been OANDA employees since the acquisition), nor our US sales operation, nor will the San Francisco office be made up of solely executive staff. In fact, several employees from across disciplines and North American cities, most of whom are not executive management, are re-locating to San Francisco. In addition, OANDA will further be able to recruit from the talent pool in San Francisco, as well as retain its top talent with unique career opportunities. Founded as a company that leverages technology to disrupt… Read more »
Agree with you Adil. Looks like this is the start of the ASIC’s implementation of further requirements. If ASIC and NZ FMA/FSP are going to have strict criteria, then brokers may look to gain Japanese FSA licenses instead – also a stringent procedure but gets them into a more lucrative market. Just a thought….
No … I don’t agree with you guys … this is just FXpro not making any money in Australia and just shutting the office down to save some cash. Has nothing to do with ASIC.
Yes, I agree with MC. And I received theirs email to let me transfer my account to UK or Cyprus.
@MC and Randy. ASIC regulation is something that a reputable broker usually wants in their pocket, especially when migrating from an offshore shadow. I could not see ASIC regulation HURTING a broker, except either they cannot afford it or the compliance requirements are not suitable for their needs.
ASIC so far has the best of all worlds in terms of leverage, safety of client funds, and transparency requirements of broker. Can you think of a better jurisdiction for this?
FxPro does already have Uk FSA license though.
@Jon
What kind of policy for “safety of clients funds”, any words? FSA cover 80K pound, NFA implement real time check and deal with banks directly, what kind of policy does ASIC offer?
Thanks
The Japanese retail market must look attractive to any operator, but Japanese FSA licenses can’t be easy to maintain, surely? I imagine an operator would probably have to have offices and staff in Japan, and this is relatively costly. Even with good technology, Japanesifying it to attract Japanese customers too is a non-trivial feat. However, Japanese customers have tax incentives to trade with Japan regulated brokers now. (Under tax treatment starting in for 2012, Japanese trades pay a flat 20% rate of tax on FX profits. However this doesn’t apply to Japan residents who trade with offshore brokers – income… Read more »
I maybe wrong, but doesnt safety of funds only cover residents of that particular country or region that the regulator operates under.
it’s extremely expensive indeed, however tell me if it ain’t worth it: http://forexmagnates.com/back-to-back-record-months-at-gmo-click-securities/
@Paul – that is correct. However I expect this to change in future. Currently an ASIC regulated broker can use a dealing desk overseas and the regulator cannot enforce any actions against that broker if the dealing desk is outside Australia – even if the broker is Australian and ASIC regulated.
The thing I wonder though Michael, is how much profit GMO Securities etc are making on all this large volume? The competition in Japan is fierce and the spreads are razor thin. Great for traders of course, but I’m wondering how long it can continue.