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While I'm not authorized to comment on our stock, you can contact our Investor Relations department with any related questions at [email protected]. It's worth noting that since we are a publicly-traded company (NYSE ticker: FXCM), the details of our finances are readily available in contrast to brokers that are privately-held firms.
Despite the events of January 15, 2015, FXCM remains in a strong competitive position with excess regulatory capital (over $200 million worldwide) and operation cash (over $300 million) similar to before the SNB event.
I'll stress it here again, FXCM is not insolvent, has not filed for any form of bankruptcy, and is in compliance with all regulatory capital requirements in the jurisdictions in which we operate. Additionally, all of our regulated entities except the US provide clients with segregated funds. All of our global client base in our regulated entities minus US clients would be protected under a bankruptcy. Our UK regulated entity through the FSCS even offers clients £50,000 per person in protection. Canada has similar insurance for retail traders of up to $1 million.
@SuperSaan, since you live in the Netherlands, you can open an account with FXCM UK and benefit from the 50k FSCS protection.
@SMCJB, since you live in the US, below are recent capital figures for US-regulated forex brokers (RFEDs) as reported to the CFTC.
If you have questions about our services at FXCM please send me a Private Message.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
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I don't personally trade FX and was just trying to direct @SuperSaan to somebody who could answer his questions (ie your FXCM threads) but since you brought me into the equation I would point out that you never actually answered @SuperSaan 's question
Obviously you can't answer the second half of the question but what about the first half of the question? What happen's to his money if you go bankrupt? Personally I would add to the question "How does this compare to Refco, PFG Best and MF Global who all also had "Segregated client funds". I realize @SuperSaan 's is in the Netherlands and not the US, but this question is especially important for US clients since you highlight that your US clients don't have segregated funds?
In my opinion, all this business about FXCM's loan arrangements and their ability to service the interest-payments arising from them are actually kind of tangential to the main question hanging over them, which relates to whether one should really want to trade with a company with their history of regulatory investigations and fines relating directly to the ways in which they've treated their customers in the past.
You raise a good point about forex trading in the US.
Unlike in other countries, there is no insurance for forex accounts when trading through a US-regulated broker. However, US regulations prohibit anyone but US-regulated brokers from offering forex trading to US residents. That means, if a US broker goes bankrupt, as happened with PFG Best, Refco and MF Global, then there is no insurance in the US to protect their clients. (It's worth noting that international clients of those firms who traded through their UK and Canadian entities did have their funds protected by the insurance programs available in those countries, which I mentioned in my previous post.)
If you're trading forex in the US, the capitalization of your broker becomes all the more important. That's why I highlighted for you our net capital figures both in the US and worldwide, which show that despite the events of January 15th, FXCM remains in a strong competitive position.
If you have questions about our services at FXCM please send me a Private Message.
FXCM takes regulations very seriously, and we believe it is in our clients' best interests to have regulatory oversight and transparency. That's why we are regulated in multiple jurisdictions across 4 continents and have over 80 employees in our compliance department as mentioned by our CEO Drew Niv in a recent earnings call. This is not to excuse past regulatory actions, but to emphasize how proactive we are in identifying problems and making sure they are corrected.
FXCM actively works with regulators to resolve issues and ensure the best trading environment possible for our clients. For example, the NFA and FCA actions for positive slippage not being passed on prior to 2010 were mentioned earlier in this thread. We reimbursed current and former clients who were affected in full, and the changes we made then mean that, since 2010, FXCM passes on positive slippage on all order types including market and limit orders.
It's important to note that to this day, some brokers may still not provide positive slippage to their clients, while others may provide positive slippage on some order types, but don't provide it on other order types. Some brokers may re-quote their clients when the price moves in their clients' favor but fail to re-quote when the price moves against them. There are no re-quotes at FXCM.
In addition, FXCM offers true limit orders on all the platforms we offer including MT4. That means our clients cannot receive negative slippage on their limit orders, only positive slippage. By contrast, some forex brokers treat limit orders on MT4 like market orders when triggered opening up the possibility of negative slippage.
When FXCM was founded in 1999, we were one of the pioneers in what is still a relatively young and quickly evolving industry that is retail forex. Our popularity is due in no small part to our ability to adapt to and lead change in this market. The stats below demonstrate this.
A study of over 43 million trades executed through FXCM over a 12-month period from September 2013 through August 2014 revealed in that year FXCM clients benefited from over $21 million in positive slippage.
76.2% of all orders had no slippage.
13.5% of all orders received positive slippage. (AKA price improvements)
10.2% of all orders received negative slippage.
Over 58% of all limit and limit entry orders received positive slippage.
52% of all stop and stop entry orders received negative slippage.
Our greater size means we are under a greater amount of scrutiny than other firms. We appreciate that responsibility and believe in leading the way in transparency. Our recent transition to a raw FX spread pricing model with separate commissions is just the latest example.
If you have questions about our services at FXCM please send me a Private Message.
I can verify that on many trades I have gotten positive slippage when the price moves rapidly through my target. Once, I got close to 20 pips negative slippage on my stop, but that was on an HFT. I don't think FXCM has anything to do with that. It is HFTs in the eur/usd that you have to watch for.
I have been trading EUR/USD for a few weeks on FXCM. I have noticed that there can be high volatility spikes on the one minute bar at unpredictable times. When this happens, your stop slips and you get out with a large loss. Furthermore, these high …
You have your job to do, here, and you do it well.
But nothing you said actually addresses my opinion that the main question for people considering trading through FXCM at the moment relates to whether one should really want to trade with a company with your history of regulatory investigations and fines relating directly to the ways in which you've treated your customers in the past.
You can't deny what's happened in the past, and that the regulators have fined your company so much money over adverse regulatory findings about exactly that.
I don't see much potential gain, from your perspective, in discussing all that in detail, but I'm happy to, if you really want to. (I'd just "let it go", if I were you.)
From someone looking for a forex broker, I am wondering what FXCM has done to insurance that things like what has happened in the past will not repeat in the future. What steps have been taking to fix the issues?
Thanks for your feedback, Jodistrict. I'm glad you have benefited from positive slippage on trades with us. The stats above show that positive slippage is more common with limit orders, while negative slippage is more common with stop orders. This has to do with the momentum of price movement when such order types are triggered.
If you have questions about our services at FXCM please send me a Private Message.
Nor would we want to do that. A key to our popularity is that our goal is not only to lead the retail forex industry in terms of accounts and trading volume, but also in terms of transparency with regards to both our financials and trade execution. This is why we're one of the only retail forex brokers to be regulated on four continents.
All that said, I respect your decision on whom to trade with and wish you all the best with your trading.
If you have questions about our services at FXCM please send me a Private Message.
