If there is a bright side to the events in Cyprus, it has been the increase of transparency emanating from the Island’s many forex brokers. We have already seen numerous posting of firms explaining that they are holding minimal funds in Cyprus and the overall effects of a deposit haircut won’t affect client accounts or their overall business.
Following on the trend, Markets.com has announced the release of audited information from KPMG Cyprus in relation to the location of their capital. According to the report, nearly 98% of its funds are being held in the UK, Germany, and Swiss banks with Moody’s credit ratings of A1 and above. They also added that they plan on providing similar information on a monthly basis. Taking things a little farther, Markets.com also called on all firm’s to provide increase disclosure.
While transparency is always appreciated by the public markets, what was missing was information on Markets.com’s overall Net Capital and Client Asset figures. In this regard, due to the current unease in the market, we are expecting more brokers that are typically quiet to be providing greater details of their operations. Specifically, we have heard whispers of a Top 20 firm that is working on a financial disclosure release.
Markets.com raises the bar on transparency: publicly discloses its capital allocation
An open call to all brokers to follow suit
London, United Kingdom April 8th 2013 – In light of the recent dramatic events in Cyprus, Markets.com, operated by Safecap Investments Ltd., has taken a bold step, providing a level of transparency, unprecedented in the global brokerage industry.
On its own initiative, Markets.com is the first broker to publicly disclose where it holds its financial assets.
More than 98% of Markets.com funds are held with banking institutions, in the UK, Germany and Switzerland, all ranked by Moody’s between A1 – A3.
The FX Global Code – Is Self-Regulation the Future of the Industry?Go to article >>
In a proactive move, Markets.com, approached KPMG, one of the world’s largest accounting and auditing firms, and gave it complete access to its books and bank accounts, so it can confirm that all funds are available and held at leading financial institutions. Click here to see KPMG’s report
Markets.com Chief Economist Bill Hubbard comments: “While recent events focus on Cyprus, the past couple of years have made it clear that such transparency is critical for the clients of brokers world-over. In the last two years alone, the public has seen bankruptcies and the loss of client funds at the hands of firms considered to be reputable, industry titans, from MF Global, which was regulated in the US, UK and Japan, and PFG Best , regulated in the US. This underscores that the risk is not in a specific country or with a specific regulator. Clearly, greater transparency is needed!”
Conservative in its approach, Markets.com has deposited its own funds and those of its clients, with top-tier financial institutions, including Barclays Bank Plc, Royal Bank of Scotland Plc, Commerzbank AG and Credit Suisse. All of which have high investment grade ratings from S&P, Moody’s and Fitch.
Clients around the world need to know that their brokers actually have their funds on hand and that such funds are held with strong financial institutions.Markets.com holds itself to a higher standard – one of absolute integrity and total transparency and as such, plans to issue a regular monthly report from KPMG that will show its clients where it holds its financial assets.
The company calls on all other global brokers to follow its lead and publicly disclose the allocation of their own funds and those of their clients.
For more information, please contact:
Markets.com Chief Economist, Bill Hubbard
Markets.com is a fully licensed and regulated Forex and CFD broker, offering a broad range of trading products, and award winning service and support, in 25 languages. The Markets.com winning formula of highly competitive trading terms such as tight spreads, leverage of up to 200:1 and multi-language market analysis serves clients successfully, in over 100 countries. Via powerful download, web, mobile and tablet online trading platforms, the Markets.com advantage extends to all aspects of Forex and CFD trading.