Trading.com Secures US Approval to Operate as FX Firm

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 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) 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).

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 Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term restrictions and tightening regulations across the globe are painting the US in a better light.