Turkish Regulator CMB provides update on New FX Regulation

Turkeys financial regulator the Capital Markets Board has sent out a clear message to the public regarding the eagerly awaited regulations for spot FX.

They are expected to finalize rulings on the 25th August 2011 however a presentation by the president ont he 19th August 2011 has extended the date to 31st August 2011.

Some points discussed in the presentation:

CMB has found that the majority of trading is carried out in USD, Gold AND Euro contracts.

Firms operating in the market have been using misleading and aggressive marketing tactics refered to as 'pink' marketing techniques.

Current brokers operating in this spectrum do not possess the right competencies to offer protection to clients.

The CMB has categorised market participants who can offer this service:

Authorised agents - Market Makers Market Makers Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Market makers or called dealing desk brokers represent a type of broker that internalize flows and are taking the opposite side of a transaction submitted by their clients. The market making broker is only quoting a feed of prices to its clients. These feeds may or may not be the exact same as the prices quoted on the interbank market.Any order a client enters is processed internally and never goes out to the market, except in rare cases where a market making brokerage identifies a client as a v Read this Term, white label partners and introducing brokers.

Banks and ECN's aer expected to provide Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and pricing.

The CMB has emphasised that brokers operating in this market after the deadline will face criminal proceedings.

All unregulated websites offering 'FX trading' will be shutdown after this date.

Forexmagnates' team will be updating any announcements on this matter and carrying out a detailed analysis on the new regulations and how they will affect the market.

Contribution by Anil Abbak

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