CFTC April FCM Financials Show Continued Contraction in US Forex Industry

In what isn’t much of a surprise, the CFTC CFTC The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss The 1974 Commodity Exchange Act (CEA) in the United States created the Commodity Futures Trading Commission (CFTC). The Commission protects and regulates market activities against manipulation, fraud, and abuse trade practices and promotes fairness in futures contracts. The CEA also included the Sad-Johnson Agreement, which defined the authority and responsibilities for the monitoring of financial contracts between the Commodity Futures Trading Commission and the Securities and Exchange Commiss Read this Term’s monthly report of April FCM financials shows a decline in the size of the US Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term industry. Falling below $600m to $595.2m in US retail Forex customer assets, $7.5m of the $8.7m drop was due to ILQ’s exit from the country, which was announced this past April. By not transferring its business to other US regulated entities, it appears many of the accounts that were housed at ILQ have either moved funds to other jurisdictions or exited the market. Overall, trading in April was viewed as mediocre by many Forex brokers around the world, with reported volumes falling at lows for the year.

Beyond the retail account figures, the financials show that with the exception of FXDD, which announced its exit after the compilation of data for this report, US Forex brokers were comfortably above their net capital requirements. As such, after seeing the retail exit of ILQ and FXDD this year, and Alpari in September 2013, no remaining firms appear to be in danger of ceasing operations in the country. However, worth noting is that of the firms on the list below, as well as CitiFX Pro, which isn’t obligated to report segregated retail Forex numbers to the CFTC as it is a bank, only three are pure Forex plays; FXCM, OANDA and GAIN Capital.