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US forex broker Forex Capital Markets, aka FXCM (NYSE:FXCM), one of the world’s top three retail forex brokers in terms of largest trading volume, continues to top the list of forex brokers with the largest retail client assets in the US, according to data published by the US Commodity Futures Trading Commission (CFTC).
The broker reported its total client deposits stayed flattish on the month at $176.6 million in February 2016. Compared to a year earlier, the figure represents an increase of 2.5%. In comparison, a month earlier, FXCM’s retail forex obligations exceeded $176.5 million, while in February 2015 they were $172.3 million.
FXCM’s adjusted net capital went down to $54.7 million at the end of February from $61.1 million a month earlier. The amount exceeded the capital requirement by nearly $23.9 million.
The US regulator also published the same data for all six forex brokers on the local retail market. More details about the CFTC’s data regarding FXCM follows (as at 29 February 2016):
FXCM offers both retail and wholesale trading services. In February, the brokerage generated a trading volume of $309 billion from retail operations and $53 billion from institutional clients, according to its latest monthly metrics report. Over the month, this represents a decline of 7% for the retail segment and a growth of 47% for the institutional one, while on an annual basis the volumes grew 36% from retail clients and 18% from institutional customers.
The brokerage handled in February 175,522 active retail client accounts and 165,279 tradable retail client accounts, or while those with enough funds in them to place a trade, each up by 2% from a month earlier. FXCM executed 654,287 trades per day from retail clients in February, or down by 5% on the month and up by 45% over the year. The average daily institutional client trades numbered 50,373 in February, posting an increase both over the month and on the year of 24% and 380%, respectively.
In February, FXCM decided to terminated trading in the USD/HKD currency pair, as reported by finance news provider Finance Magnates, over fears that if the Hong Kong dollar (HKD) gets unpegged from the US dollar (USD), this would result in customer losses. The broker said at the time it expected disruption and high volatility of the USD/HKD pair in the upcoming weeks.
In January 2015, FXCM suffered significant losses after the Swiss central bank unpegged the Swiss frank (CHF) from the Euro (EUR). The broker’s clients suffered heavy losses and generated negative equity balances of combined some $225 million, putting FXCM in breach of the regulatory capital requirements. To offset the losses, FXCM had to draw a cash credit of $300 million from Leucadia National Corporation and to sell two of its subsidiaries – FXCM Japan Securities and FXCM Asia, aka FXCM Hong Kong.
Last month, FXCM announced it has extended its credit agreement with Leucadia by one year to January 2018. With the move, the broker aims to win more time to optimize remaining asset sales. As a result of this, on the day following the announcement, the broker’s stocks fell 22.5% upon the opening of the New York Stock Exchange (NYSE).
Also in March, FXCM decided to discontinue its partnership with one of its introducing brokers (IB), Avail Trading Corp., operating under the brand ATC Brokers, after it filed for bankruptcy. FXCM noted at the time that the investments of its clients who traded via ATC Brokers are safe as they are held by FXCM and not the IB.
Meanwhile, the US broker has entered into a white-label agreement with Halifax New Zealand Ltd., under which FXCM will transfer its existing clients in New Zealand to its partner in the coming months.
FXCM is a registered futures commission merchant (FCM) and a retail foreign exchange dealer (RFED) with the US CFTC. It has units registered and regulated with the relevant authorities in the US, the UK, Australia, and France.
The broker offers forex, contracts for difference (CFDs), and spread betting services. It offers 40 currency pairs on the Trading Station and MetaTrader 4 (MT4) trading platforms.