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Regulation and consolidation in the US market - number of brokers offering retail forex trading plummets 50% in 4 years

by Michael Greenberg
    Regulation and consolidation in the US market - number of brokers offering retail forex trading plummets 50% in 4 years
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    Having seen two US brokers go public in the last 12 months and many more withdraw and being bought it's time to see what happened to US retail Forex industry sinc regulation became more stringent. Bottom line is that since Q3 2007 (4 years ago) number of US registered brokers offering retail Forex Trading has dropped almost 50% from 32 registered brokers to 17 today. Taking into account the overall trend and adding personal knowledge on a situation of several US retail forex brokers we can also safely estimate that in the coming 6 months at least two more brokers will exit the US market. On the other hand brokers like optionsxpress may start offering retail forex trading - there's no estimate on the date though.

    Added to the chart is the major regulatory decisions and requirements such as net capital increase over the years and the Dodd-Frank bill. It's interesting to note that the number of forex brokers is not immediately affected by these regulations but that it takes them time to digest the requirements and either exit or sell the client base.

    Notes:

    $ - first net capital requirement increase to $5 million

    $$ - to $10 million

    $$$ - to $15 million

    $$$$ - to $20 million

    * - FIFO (anti-hedging), leverage cap to maximum of 1:100

    ** - Dodd-Frank bill, RFED status requirements, max leverage 1:50

    Up-to-date list of US brokers offering retail forex trading:

    1. Interactive Brokers
    2. MF Global
    3. thinkorswim
    4. FXCM
    5. Gain
    6. Alpari
    7. Interbank FX
    8. FX Club
    9. FX Solutions
    10. OANDA
    11. MB Trading
    12. GFT
    13. FXDD
    14. Advanced Markets
    15. PFG
    16. TradeStation
    17. CitiFX Pro

    Grab your latest copy of the Forex Magnates Retail Forex Industry Report for Q1 2011.

    Having seen two US brokers go public in the last 12 months and many more withdraw and being bought it's time to see what happened to US retail Forex industry sinc regulation became more stringent. Bottom line is that since Q3 2007 (4 years ago) number of US registered brokers offering retail Forex Trading has dropped almost 50% from 32 registered brokers to 17 today. Taking into account the overall trend and adding personal knowledge on a situation of several US retail forex brokers we can also safely estimate that in the coming 6 months at least two more brokers will exit the US market. On the other hand brokers like optionsxpress may start offering retail forex trading - there's no estimate on the date though.

    Added to the chart is the major regulatory decisions and requirements such as net capital increase over the years and the Dodd-Frank bill. It's interesting to note that the number of forex brokers is not immediately affected by these regulations but that it takes them time to digest the requirements and either exit or sell the client base.

    Notes:

    $ - first net capital requirement increase to $5 million

    $$ - to $10 million

    $$$ - to $15 million

    $$$$ - to $20 million

    * - FIFO (anti-hedging), leverage cap to maximum of 1:100

    ** - Dodd-Frank bill, RFED status requirements, max leverage 1:50

    Up-to-date list of US brokers offering retail forex trading:

    1. Interactive Brokers
    2. MF Global
    3. thinkorswim
    4. FXCM
    5. Gain
    6. Alpari
    7. Interbank FX
    8. FX Club
    9. FX Solutions
    10. OANDA
    11. MB Trading
    12. GFT
    13. FXDD
    14. Advanced Markets
    15. PFG
    16. TradeStation
    17. CitiFX Pro

    Grab your latest copy of the Forex Magnates Retail Forex Industry Report for Q1 2011.

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