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U.S. Retail Forex Assets Contract for Third Consecutive Month

U.S. retail Forex brokers appear to be having really tough time lately, with the latest raft of data from the Commodity Futures Trading Commission (CFTC) on futures commission merchants (FCMs), showing that retail FX funds shrank for a third month in a row in June. Ouch!

 
Moreover, the decline is getting steeper and steeper: in April the decrease was meagre $177,260, and then it ballooned to $ 3.16 million in May. The situation appears to even worse now, with the amount of retail funds held by US brokers falling by more than $9 million in June against the preceding month.
 
Let's look at the fortunes of different brokers in respect of customer assets held:
 
FCM Data for June 2013
 
One can see that America's favourite broker FXCM managed to thrive despite the overall gloom – it increased the quantity of customer assets in its possession by $2.05 million during the month, remaining the FX retail broker in the U.S. with the greatest amount of retail funds - $151 million. 
But the broker with the steepest jump in retail funds was IBFX Inc – the rise was massive $2.6 million, to $75.6 million. The main factor underlying these positive results appears to be the trust of clients in their brokers.
 
But most brokers, although trustworthy, had some hard experience in June: Interactive Brokers, for example, saw the steepest decline of $5.26 million in customer assets. 
 
As one can see, the picture is rather gloomy and we cannot help but wonder why some of the most credible Forex companies suffer such declines. It's unlikely that the trust of the clients is hit, given the rigid U.S. regulations from the National Futures Association (NFA) and the CFTC – one of the severest watchdogs out there. In fact, it could be that these stiff regulations are creating troubles for the Forex sector in the U.S. To give you a fresh example, at the end of June new capital requirements for FCMs came into force – the FCMs are since obliged to have a minimum net capital of $20 million. These regulators are not kidding – and the future of the retail FX market in the U.S. does not loom rosy at all. Let's see how the clients behave in the coming months.
 
TAGS: us forex  us forex brokers  united states forex  retail forex market  retail forex funds  forex customer assets  regulators  cfct  fxcm  ibfx  interactive brokers 
Broker Country Regulation Platform Min Deposit Review
US CFTC, NFA MT4, Web,
in-house
$50 Review Website
US NFA, CFTC MT4 $250 Review Website
Cyprus, UK, Mauritius CySec, FCA, FSC MT4, MT5, Web $10 Review Website
Australia ASIC MT4, MT5,
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Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
UK FCA MT5 $5 Review Website
UK FCA MT4, Web, MT4
for Mac
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Australia, UK ASIC, FCA MT4, MT5,
cTrader
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UK, Cyprus, Dubai FCA, CySEC, DFSA MT4, MT5, Web,
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