Royal Bank of Scotland Announces Imminent Closure of marketindex CFD Division

Royal Bank of Scotland is a giant among giants in London’s financial sector, established in 1727 in Scotland and now employing 141,000 staff across various regions worldwide.

Despite, its huge presence in the world’s largest financial center, the company has announced its intention to cease its CFD trading service, marketindex, with effect from November 8, this year.

The doors will close on marketindex for the last time at 4.00pm that day, and there will be no further trading, and no transfer of business to other divisions of the company, resulting in the company terminating its relationship with all marketindex clients forthwith.

Winding Down CFD Operations

The Royal Bank of Scotland issued a public notice on its marketindex website today that all trades or positions should be closed by marketindex customers before November 8, 2013, and that any open trades or positions and all unexecuted orders at that time will be closed by RBS, in accordance with marketindex terms and conditions.

Such orders will be closed at the marketindex price applicable at 4.00pm on November 8, 2013 and depending on the market conditions at that time, Royal Bank of Scotland points out that clients may lose money as a result of this closure.

The announcement advises that all customers of marketindex should ensure that they have withdrawn all remaining funds back to their reference account prior to the closure date. Any funds remaining in the trading account on or after the closure date will be returned to each customer’s reference account shortly after the winding down of operations, with the bank aiming to return all funds within 4 weeks of marketindex’s closure.

End Of The Road for CFDs?

The point of interest here is that CFDs have enjoyed a degree of popularity in Britain, resulting in the trading landscape within the retail sector being somewhat different from other regions. British retail FX companies often provide their clients with bespoke, purpose-designed platforms which are geared toward spread betting and CFD trading rather than MetaTrader 4’s FX orientation.

This can be exemplified by companies such as ETX Capital and AFX Capital Markets providing a different, mainstream FX service to overseas customers, and bespoke, in-house developed systems to British spread betting and CFD customers.

In an interview with Forex Magnates last week, Ishaq Siddiqi, ETX Capital’s Market Strategist explained that “The spread betting and CFD industry is growing outside of the UK and for us, international expansion is paramount to stay ahead of the curve. WorldSpreads proved to be a very successful acquisition for us, as we have established businesses in Spain, Greece and Denmark on the back of that acquisition.”

New CFD Platform Launched Today By ETX Capital

Today, the firm has partnered with Bet3000, to launch a brand new CFD trading service. The website will offer Bet3000’s sportsbook and casino client base the chance to trade on financial derivatives through the use of Contracts for Differences (CFDs). The company cites one of the main advantages of the alliance as being the opportunity to access a brand new client base.

The partnership includes full access to ETX Capital’s advanced Trading Platform , competitive spreads and extensive market tools and education program, giving new and existing Bet3000 customers a strong start in the market.

Simon Springer, founder of Bet3000, today made a corporate statement on the partnership: “We chose ETX Capital as our partner for their superior trading platform, experienced and knowledgeable management team and their financial stability. The product was delivered on time and of a high quality.”

When considering the view of other companies within the UK, however, it could be perceived that things are somewhat different. A London-based broker explained to Forex Magnates this morning that “the whole CFD industry is fairly depressed. Volumes are low and brokers are also not holding large overnight portfolios any more (which they earned financing on) due to the increased perceived risks, and subsequently, clients and brokers have turned their attention to other areas like FX”.

The Royal Bank of Scotland has managed to retain its position as a dominant force in the financial sector, despite a series of controversies surrounding its conduct in events leading up to the financial crisis of 2008 and subsequent to its nationalization.