MRG Forex hikes margins on GBP pairs on LP recommendation

MRG Forex hikes margins on GBP pairs on LP recommendation

- in All News, Forex Brokers
GBP UK

Maxrich Group (MRG), trading as MRG Forex, said on Tuesday it will increase minimum margin requirements for pairs with the British pound (GBP) in line with the recent recommendations of the US National Futures Association (NFA) and following the GBP’s continuous downfall movements. The new conditions will be into effect as of the opening of the markets on 17 November, 2016, and will apply for both existing and new positions.

Earlier in November, the NFA increased to 5% the minimum security deposits required to be collected and maintained by Forex Dealer Members (FDMs) for currency pairs involving the GBP. The move aims to offset the effects on the markets of the UK’s decision from 23 June this year to exit the European Union (aka Brexit).

MRG Forex said it has received a recommendation from its liquidity provider to hike margins. It also noted margins could be further increased should volatility continue to grow.

“[…] our liquidity provider feels a strong sense of responsibility in order to protect the clients from volatility and risk from GBP currency pairs,” the broker said in a statement. MRG Forex does not disclose on its website who its liquidity providers are. It says it offers liquidity from trans-institutional networks – major banks and forex market participants at all levels.

mrg-forex-accounts

The changes will touch the following currency pairs – GBP/USD, GBP/AUD, GBP/NZD, GBP/CAD, GBP/JPY, and EUR/GBP.  For clients with Basic accounts margins for these pairs will be increased to $400 for one standard lot, while holders of Premium or Sharia accounts margins will be set at a minimum $1,000 for a single standard lot. For details on the trading conditions of the three accounts, please see the image on the right.

After the UK decided via a referendum to exit the EU, the GBP lost its power, resulting in deep volatility, which continues to date.  Additionally, on 7 October the GBP collapsed unexpectedly. The “flash crash” happened shortly after midnight London time that day when within a couple of minutes the GBP crashed 6.1% to $1.1819 against the USD, reaching a historical 31-year low. There were several possible scenarios of what caused the sudden movement.

After the Brexit vote, the GBP crashed against the USD and has not managed to recover since then.
After the Brexit vote, the GBP crashed against the USD and has not managed to recover since then.

Maxrich Group is based in New Zealand and is also registered in the British Virgin Islands. It’s a straight-through processing (STP) broker that provides over-the-counter forex trading services. The brokerage is a member of of the Financial Services Complaints Ltd (FSCL), an independent New Zealand not-for-profit external dispute resolution (EDR) organization.

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