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U.S. Retail Forex Assets Keep Shrinking, FXCM Registers Growth

The U.S. Commodity Futures Trading Commission (CFTC) has released its FCM data for May 2013 already, and the first thing that one notices is the overall decrease in customer assets held with brokers: compared to April this year, in May U.S. Retail traders kept about $3 million less in their trading accounts. 

 
This figure is indeed quite small given that it reflects the client money held by all 12 retail brokers in the USA, however it's the second month in a row when there's a decrease so we could be witnessing an indication for a shrinking market. 
 
Of course, some brokers still report growth – but at a very lethargic rate. As usual, FXCM is at the front and leads with an increase of 2.1% compared to the previous month – which is a tad disappointing, considering that according to recent reports America chose precisely that brokerage to be its favorite. Honestly, I expected a little more from FXCM's clients. Then again, May's markets were quite volatile so I'm willing to cut traders some slack. 
 
Forex.com is another broker that was happy to report a slight rise in customer assets – and when I say slight, I mean 0.3%-slight. Then again, in May the broker didn't acquire any other brokerage so that makes sense (I'm kidding, of course). 
 
OANDA was the broker that took the biggest hit this May – it registered a decrease of 6%, followed by Interactive Brokers (5.8% down) and Alpari US (a 3.5% fall in customer assets). 
 
Obviously, the retail forex market in the USA is far from glorious but at least it does remain sustainable for now. Objectively, it does possess all the characteristic required to grow and develop, so one has to wonder what's preventing it from doing so. 
 
FCM Data - May 2013
 
I'm not going to point any fingers here but it seems to me that all the obstacles both brokers and traders are facing come from regulators – the National Futures Association (NFA) is relentless in its effort to suggest more and more restrictions to financial services providers, and the CFTC doesn't wait too long to accept. While the US forex market is perhaps the one with strongest regulation, it also tends to suffer from that same regulation. Frankly, if I were in the NFA's or CFTC's shoes, I would look for a golden mean  between overseeing the market and allowing traders enough opportunities for profitable trading. After all, there are many other jurisdictions and regulatory bodies that the States can learn from – take the UK and the Financial Conduct Authority (FCA) there for example, or the Australian Securities and Investments Commission.
 
Don't get wrong, though – I'm not worried for the future of brokers like FXCM or Forex.com. I am sure that whatever constraints regulators impose on the US retail market, they would continue thriving on a global scale but then again, why make things hard when they can be easy? Just sayin'. 
 
 

About FXCM

 
FXCM is a global online provider of foreign exchange (forex) trading and related services to retail and institutional customers world-wide.
 
At the heart of FXCM's client offering is No Dealing Desk forex trading. Clients benefit from FXCM's large network of forex liquidity providers enabling FXCM to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts.
 
FXCM's U.K. subsidiary, Forex Capital Markets Limited, also offers CFD products with no re-quote trading and allows clients to trade oil, gold, silver and stock indices along with forex on one platform. In addition, FXCM offers educational courses on forex trading and provides free news and market research through DailyFX.com.
TAGS: forex  forex trading  forex broker  retail forex  CFTC  NFA  FXCM  Forex.com  OANDA  Interactive Brokers  IBFX  forex growth 

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