Trading.com Markets Inc, part of the Trading Point Group, has secured approval from the National Futures Association (NFA) and been registered as a retail foreign exchange (forex) dealer, after applying for the licence more than a year ago.
According to the BASIC system of the NFA, Trading.com Markets Inc was approved as a forex firm and NFA member, in addition to being registered as a retail FX dealer on the 20th of April, 2020.
Trading.com applied for US licence in 2019
Trading.com Markets Inc is a brand of Trading Point Group, which also runs the retail broker XM. As Finance Magnates reported, the Group applied for the licence on the 1st of March last year.
Whilst the company waited for its licence in the United States, the Group proceeded with a soft launch in Europe, which saw the company launch its website in July for its operations regulated by the Financial Conduct Authority (FCA).
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Retail FX brokers return to the US
The approval of Trading.com comes at a time when FX brokers are returning to the United States. In 2006, forty retail brokers were operating in the country, however, following the 2010 Dodd-Frank Act, the numbers now stand at five – Gain Capital (Forex.com), IG US, Interactive Brokers, OANDA and TD Ameritrade.
As Finance Magnates analysed, the reason for that steep drop was because the Act, along with a host of other regulations aimed at protecting retail customers in the financial services industry, massively upped brokers’ capital requirements.
Any retail forex broker operating in the US must have a minimum of $20 million on its balance sheet at any given time. On top of that, firms must maintain 5 per cent of customer liabilities that exceed $10 million.
Whilst this was originally a turn off for FX brokers, considering that other jurisdictions such as Europe had easier regulations, the US has since seen a come back in recent years, as leverage restrictions and tightening regulations across the globe are painting the US in a better light.