IBFX made headlines when it announced its exit from retail foreign exchange in the U.S. and Australia only a couple of weeks ago. Following an announcement by the U.S. Commodity Futures Trading Commission (CFTC), we are now receiving more information about what might have played a key role in the company’s decision.
The foreign exchange subsidiary of TradeStation, which in itself is a subsidiary of Japanese Monex Group, has settled charges with the U.S. financial regulator agreeing to pay a $1 million penalty. IBFX Inc. failed to meet the minimum capital requirements for retail foreign exchange dealers (RFEDs) in the aftermath of the Swiss National Bank debacle last January.
The CFTC also states that the company failed to report the violation in a timely manner. According to an announcement made by the CFTC, the wrongdoing occurred between the 15th of January and the 5th of February 2015. The regulator also highlights that the firm failed to adequately supervise the adherence to capital requirements and violated a prior CFTC order.
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As part of the CFTC order, IBFX is also settling some prior charges related to the same type of violation (which amounted to $600,000), after which the company was mandated to develop an automated tool to supervise its adherence to minimum capital requirements.
The draconian capital requirements which were recently increased by the National Futures Association and the overzealous regime enforced by the CFTC have been frequently blamed for squeezing the market players and leaving little choice for retail traders in the U.S.
Aside from IBFX, last year the market saw another player in the market getting squeezed out after MBTrading was acquired by TradeKing.
After parting with its MetaTrader 4 accounts in 2014 via a deal with FXCM, IBFX sold off its remaining business to OANDA last month. TradeStation has also recently announced changes at the top level after the retirement of Salomon Sredni. He will be succeeded by John Bartleman effective from the 1st of April.