During the passing week the most interesting stories from the online trading world included a number of new restrictions on the operations of brokers in Europe.
Cyprus regulated broker RoboForex has revealed its latest project – RoboForex Stocks – which offers CFD trading on the US stock market.
The platform offers over 8,000 stocks and ETFs, based on the last price and price/time priority (not bid/ask prices). Orders are displayed on the chart and real exchange quotes are delivered directly into the platform. Umstel’s platform also automatically supports all corporate events, including dividends, splits, and mergers.
The provider of the technology is Umstel, a web-oriented Trading Platform from Hong Kong. RoboForex’s team in Germany has also started cooperating with Juergen Wunner, a professional portfolio manager with over 20 years experience with such companies as Julius Baer, Deka, and Nomura, managing assets up to 700 million EUR.
FXCM's client trading metrics for the month of September showed that the brokerage has registered activity 20 per cent higher than in August, and a tiny 0.6 per cent lower than in September 2015.
FXCM charged a dormancy fee to its retail clients in September, a move which drove the number of accounts lower by 11 per cent.
Goodbye Hello Markets, Hello Hello Group
Hello Markets, a provider of white label trading solutions, has merged Hello Markets, Hello Football, and Hello Diamonds into one cohesive group.
This rebranding is the group's second iteration in nearly two years - it changed its name from Hello Binary to Hello Markets in September 2014. The move originally brought some new offerings to the table as the firm developed a forex trading component for its platform.
This follows an earlier initiative back in April that saw the group launch a new offering, called Hello Football, which was aimed at football clubs, scouts, agents, investment funds, pundits, press and football players.
“This move takes Hello Group into a new chapter in our history, as we prepare to announce even more products in the near future — further reaffirming our commitment to new advances in technology,” said Hello Group’s CEO Jeremy Dahan.
ESMA Terminates Bonus Practices Tied to Trading
The European Securities Markets Authority (ESMA) issued a clarification related to the use of bonuses by retail forex and binary options brokerages, stating that all bonus promotions used by brokerages that are tied to trading volumes are to be suspended.
ESMA justified its decision by highlighting the psychological impact that a bonus may have on a client’s trading behavior. Traders are starting to take bigger risks, which ultimately results in them losing their account principal.
This move effectively eliminates one of the key retention and on-boarding tools which brokers have been using. The binary options industry has been heavily reliant on supplying its clients with bonuses under conditions which deliver substantial obligations for clients who are willing to withdraw their funds. Clients of binary options brokers are frequently required to make a turnover of 20 to 30 times the amount of their bonus in order to be able to withdraw it.
ESMA states that companies that use this practice do not adhere to the requirement of looking after the best interests of clients.
ESMA Enforces One Day Withdrawal Approval
With a batch of complaints flooding the European Securities Markets Authority (ESMA), the regulator has decided that national regulators will have to enforce a one day withdrawal term for companies that offer products such as forex, CFDs and binary options.
If a company is delaying withdrawal requests it might well be having financial difficulties and could arouse suspicions regarding the use of client funds.
According to ESMA, brokers should be having immediate access to client funds and comply with withdrawal requests immediately because brokers are obliged to hold client funds in segregated accounts with commercial banks.
According to a statement issused by ESMA: “It has been observed in this sector of the market that retail client complaints received by firms offering CFDs and other speculative products often mention delays withdrawing funds. Furthermore, delays in returning client funds could also be symptomatic of one or more other underlying issues that may require further supervisory attention.”
The Cyprus Securities and Exchange Commission (CySEC ) said in a recent statement that due to the extremely high numbers of applications received for participation in the scheme, it has suspended applications.
The deadlines set in this accelerated procedure are considerably reduced when compared to those of the normal examination process.
It seems the initiative was very successful but the regulator was not ready for the huge rush. CySEC said that they will be processed accordingly, however further applications will not be accepted.
It was also clarified that it will launch the scheme again on January 2nd, 2017, the only difference being that from next year on, a flat fee of €25,000 will apply for applicants wishing to participate in the fast-track scheme.
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