Brokerages Capital Index and FXPrimus have not experienced negative consequences from the market volatility caused after UK citizens decided to exit the European Union, both brokers said on Monday in separate notices.
FXPrimus felt, according to one of the notices, “zero financial impact from the market volatility” caused by the UK vote and the broker has even “come out of these volatile market movements even stronger”.
“While some currency pairs showed wider than average spreads due to periods of low liquidity, our technology, platform, and price feed remained intact allowing clients to conduct transactions as usual,” FXPrimus’ notice read.
Meanwhile, Capital Index announced it incurred no losses despite the volatile market conditions.
“We had contingency plans in place that we activated, including a measured increase in margins before the referendum, and extra support and trading staff during the results,” Capital Index CEO Robert Woolfe said. “We kept our clients informed during this process and will continue to do so as we review our current offering with a view to reducing margin levels as the volatility begins to abate,” he added.
The UK voted on Thursday to exit the European Union (Brexit), causing significant market volatility and uncertainty. As a result of the aftershock, the British pound (GBP) crushed to very low levels and continues to fall.
Prior to the vote, FXPrimus and Capital Index both temporarily increased minimum margin requirements on GBP pairs and some other instruments. These conditions were into effect until 24 June for FXPrimus clients and it seems are still into effect for traders with Capital Index. When the broker will resume its normal trading conditions is not clear.
Also on Monday, AxiTrader also announced it was not affected negatively by the market conditions in the past few days and is has gotten back to its normal trading conditions, while Plus500, another forex brokerage, said it saw record-high number of sign-ups and new customers in a single day after the Brexit vote, as well as record spread revenue.
FXPrimus is a broker of forex, commodities, energies and indices. It holds a license by the Cyprus Securities and Exchange Commission (CySEC) since December 2014 and can offer its services to clients from all EU member states. It used to hold a license in the Mauritius, but in late March this year the local financial regulator, the Financial Services Commission (FSC), revoked the broker’s license, after suspending it in May 2015 for an indefinite period. The reason was that the Mauritius regulator found FXPrimus guilty of breaching several local laws.
Capital Index offers trading in contracts for difference (CFDs) and spread betting on forex, commodities, indices and metals. It is a brand used by sister companies Capital Index UK, which is licensed by the UK Financial Conduct Authority (FCA), and Capital Index Cyprus, which holds a license from the Cyprus Securities and Exchange Commission (CySEC). Capital Index UK in South Africa is a juristic representative of Khwezi Financial Services which is authorized and regulated by the Financial Services Board (FSB).
Source: Capital Index/FXPrimus