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FXCM Sets Up FXCM Markets: An Unregulated Global Subsidiary

FXCM, one of the largest global forex brokers on the market, has set up a new, unregulated subsidiary: say hello to FXCM Markets (FXCMM). The brokerage is now live and accepts applications from traders. 

 
As you may know, FXCM supports a number of different subsidiaries around the world, mostly in countries with specific regulation like the USA or Japan – and while some are restricted in terms of accepting customers (FXCM US, for example, can only allow US residents to register), others (take FXCM UK) can accept pretty much any trader, irrespective of their residence and/or nationality. 
 
This is why the launch of FXCM Markets, apparently based in Bermuda, comes a bit unexpected for us. According to company representatives, the new subsidiary is designed to reach a larger group of clients with a more complete suite of services – but at the cost of being unregulated. 
 
“FXCM Markets is a separate, unregulated entity from all other FXCM entities yet still a part of FXCM Holdings. By not being a regulated entity, FXCM Markets offers strategic advantages to both the company and account holder. From a brokerage perspective, the current regulatory environment is one of the most expensive and strictest ever with noticeable effects on various brokerages just over the past few years,” said Jaclyn Klein, VP Corporate Communications at FXCM. 
 
“From a customer’s perspective, trading with an unregulated broker may help a trader avoid being affected by any future regulatory changes that affect an individual trading style or strategy. Customers with FXCM Markets would therein be unaffected by future regulations and be able to rely on FXCM’s financial stability as shown in its publicly accessible financial reports,” Klein added. 
 
This is the point where I agree to disagree with FXCM's official statement: obviously, regulatory changes can't affect the clients of an unregulated broker – but what happens in the case of a dispute, or a broker going insolvent? Put in such gruesome circumstances, the trader has no protection whatsoever, and no regulator to have its back and help out. 
 
Don't get me wrong – I'm not saying this is a likely scenario with FXCM – but such things happen and we here religiously believe that one should always, always trade with a regulated brokerage. 
 
On the plus side, FXCM Markets welcomes new sign-ups with a lucrative offer: interest bearing accounts. With them, you earn 2,98% annual interest on non-invested deposits of over AUD 5,000 (we asked the FXCMM's customer support why AUD but the rep didn't have an adequate answer). The interest is paid monthly based on the account's average usable margin for the month. 
 
This is a good offer, indeed, but it mainly makes sense for really big investors. The interest on an AUD 5,000 account would be AUD 149/year – and in my humble opinion, for this kind of money it's just not worthy to trade with an unregulated broker. 
 
The rest of the trading conditions offered by FXCMM are similar to these of FXCM UK – leverage of up to 1:400, initial deposit as low as $50, dealing desk and NDD execution models, same spreads and trading platforms, etc. 
 
All this considered, personally I would always go with a regulated branch of FXCM – not that I don't trust FXCMM but I'd rather be safe than sorry. Just saying. 
 
 

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: FXCM  FXCM Markets  forex trading  forex broker  trading conditions  forex spread  dealing desk  no dealing desk  interest account  forex regulation 

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