The retail trading industry changed in 2019. Finance Magnates looks at what brought the biggest impact to the whole FX/CFD scene
Is it possible that one decision could have changed the image of the whole retail Forex and CFD industry? An example of how trading volumes fell in 2019 clearly shows this is not just an imaginary threat. The past year was clearly dominated by regulation and declining turnovers under the banner of the "Great Migration" of traders. The Finance Magnates Intelligence Department analyzed it in the latest edition of the Intelligence Report.
As a result of regulatory changes in Europe, retail clients have started to look for new opportunities in offshore jurisdictions like Vanuatu, Estonia, and the Bahamas, which have become the Holy Grail for investment firms. Market professionals in interviews with Finance Magnates confirmed that the change in the direction of the regulatory winds has visibly modified the strategy of the brokerage houses themselves. Companies regulated by ASIC, CySEC, and the FCA began to look towards more exotic locations to offer their clients less restrictive trading conditions, including access to higher leverage.
However, according to Daniel Byrne, Managing Director at easyMarkets APAC, ASIC is moving in the same direction as ESMA and "will imminently implement Product Intervention reforms along similar lines, centred around lowering the access to leverage for retail traders in Australia."
"While there is some conjecture as to what the precise changes will end up being, in our view, it will likely be significantly lower than it is today. We are open-minded to the changes and can see both upsides and downsides that will come with them (…) However, the regulators could ironically be placing some traders into even riskier territory by potentially driving them to less regulated jurisdictions in order to obtain their desired buying power, which they can no longer access in Australia. One thing is for sure, and that is that 2020 will be a year of enormous change for Australian Licensed FX and CFD providers," Byrne stated.
The numbers don't lie: volumes fell, Australia went up
From the beginning of 2018, when world trading volumes reached a multi-month high (excluding Japanese brokers), activity began to decline gradually. As a result, the total volume stood at 5.508 billion dollars in Q1 2018 to drop to just 4.593 billion dollars in Q2 2019 (a decline of 17%).
The fact that the retail market should prepare for change was also noticed when IG Group had to give up its leading position among the 40 biggest FX/CFD retail brokers to Australian-based IC Markets. In the first quarter of last year, the total volume of the Australian broker amounted to 563 billion dollars, compared to 474 billion reported by IG Group in the same period.
Another example, Pepperstone, perfectly illustrates how the market power of Australian brokers has increased. The local giant fears that ASIC's powers will stifle innovation in Australia.
To get the full article and the bigger-picture perspective on how industry evolved in 2019, get our latest Quarterly Intelligence Report.
Is it possible that one decision could have changed the image of the whole retail Forex and CFD industry? An example of how trading volumes fell in 2019 clearly shows this is not just an imaginary threat. The past year was clearly dominated by regulation and declining turnovers under the banner of the "Great Migration" of traders. The Finance Magnates Intelligence Department analyzed it in the latest edition of the Intelligence Report.
As a result of regulatory changes in Europe, retail clients have started to look for new opportunities in offshore jurisdictions like Vanuatu, Estonia, and the Bahamas, which have become the Holy Grail for investment firms. Market professionals in interviews with Finance Magnates confirmed that the change in the direction of the regulatory winds has visibly modified the strategy of the brokerage houses themselves. Companies regulated by ASIC, CySEC, and the FCA began to look towards more exotic locations to offer their clients less restrictive trading conditions, including access to higher leverage.
However, according to Daniel Byrne, Managing Director at easyMarkets APAC, ASIC is moving in the same direction as ESMA and "will imminently implement Product Intervention reforms along similar lines, centred around lowering the access to leverage for retail traders in Australia."
"While there is some conjecture as to what the precise changes will end up being, in our view, it will likely be significantly lower than it is today. We are open-minded to the changes and can see both upsides and downsides that will come with them (…) However, the regulators could ironically be placing some traders into even riskier territory by potentially driving them to less regulated jurisdictions in order to obtain their desired buying power, which they can no longer access in Australia. One thing is for sure, and that is that 2020 will be a year of enormous change for Australian Licensed FX and CFD providers," Byrne stated.
The numbers don't lie: volumes fell, Australia went up
From the beginning of 2018, when world trading volumes reached a multi-month high (excluding Japanese brokers), activity began to decline gradually. As a result, the total volume stood at 5.508 billion dollars in Q1 2018 to drop to just 4.593 billion dollars in Q2 2019 (a decline of 17%).
The fact that the retail market should prepare for change was also noticed when IG Group had to give up its leading position among the 40 biggest FX/CFD retail brokers to Australian-based IC Markets. In the first quarter of last year, the total volume of the Australian broker amounted to 563 billion dollars, compared to 474 billion reported by IG Group in the same period.
Another example, Pepperstone, perfectly illustrates how the market power of Australian brokers has increased. The local giant fears that ASIC's powers will stifle innovation in Australia.
To get the full article and the bigger-picture perspective on how industry evolved in 2019, get our latest Quarterly Intelligence Report.
A graduate of the Warsaw School of Economics, Sylwester received an MA specializing in finance and banking. As Finance Magnates' research associate and STA certified analyst, he leaves no stone unturned. Sylwester is the previous minority partner of an NFA registered US forex broker, and since 2003, has participated in many forex projects.
Webull Introduces "Lite" Version of Trading App for Retail Users
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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