March Trading Volumes Fall at Interactive Brokers, Gain Capital and FXCM

April 9, 2018 — 12:22 PM EDT

Trading volumes fell at many forex brokers in March, with Interactive Brokers, Gain Capital Holdings, Inc.'s (GCAP) FOREX.com and City Index brands, and FXCM reporting drop-offs compared with February. Currencies have been stuck in tight trading ranges despite volatile action in the world's equity markets, confused about the impact of Federal Reserve rate hikes and potential trade wars. However, business is booming at many brokers, with industry leader Interactive posting 40% higher volume than March 2017, while Gain exceeded year-over-year comparisons by nearly 10%.

London-based FXCM reported the weakest volume in the group, dropping 12% compared with February 2018 and 7% compared with March 2017. The broker's smaller world footprint negatively affected monthly results, following a $7 million penalty imposed by the U.S. Commodity Futures Trading Commission (CFTC) in a February 2017 agreement that effectively bans the firm from doing business on this side of the Atlantic.

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European Brokers Informed About Changes to Capital

IronFX, AvaTrade, Dukascopy, Saxo Bank and other forex brokers doing business in the European Union have received letters from regulators telling them that they need to look at their business models to ensure compliance with new rules set to go into effect later this year. The notices require affected brokers to post changes in business expectations to the Internal Capital Adequacy Assessment Process (ICAAP), a Basil II self-regulatory requirement.

The European Securities and Markets Authority (ESMA) has announced new rules that will drop leverage on major currency pairs to 30:1 from current levels, which can run as high as 200:1. The regulator has also mandated negative account protection so that clients can't lose more money than their account balance, avoiding a replay of events that followed the 2015 Swiss franc collapse. The rules will also restrict bonuses and incentives that may encourage overtrading.

New Chief Technology Officer at OANDA

Warren Faleiro has been hired as Toronto-based OANDA's new chief technology officer (CTO), raising speculation that the broker will engage in a major financial technology expansion. Faleiro took the position after serving as CTO at FreshBooks, a Canadian accounting software application provider. His impressive resume dates back to 1998, with experience at a number of blue-chip technology companies.

The executive will lead the "development and delivery of OANDA's products and services." He'll also work on enhancing the company's global technology strategy and provide "technical leadership across all areas of business." His appointment bodes well for account holders, who can look for enhancements and updates that may improve their accounts' market performance. The company currently offers both Metatrader 4 and custom-built web and mobile trading platforms.

Saxo Bank Launches Institutional Trading Platform

Saxo Bank has launched a new trading platform geared toward large institutional traders and investors but accessible by all account holders. SaxoTraderPRO allows an easy multi-screen setup through HTML5 technology that runs on both Windows and Mac operating systems. The platform replaces the standard SaxoTrader software, which is being phased out, but clients requiring fewer features can still use the proprietary SaxoTraderGO. 

Christian Hammer, head of platforms at Saxo Bank, advised that the state-of-the-art software had been designed for the broker's most active traders and institutional clients and that most retail account holders "will be better served by using the existing SaxoTraderGO web platform that is optimized for single-screen usage." However, he also admitted there are no "fixed criteria" at this time for client access.

FxPro Expands Educational Offerings

FxPro has expanded its educational offerings through the well-received "Learn From A Pro" webinar series. The program, launched in 2017, now includes more than 50 titles offered in multiple languages, including English, Italian, Spanish, German, Arabic and Chinese. The series covers a wide range of forex topics, led by industry heavyweights Phillip Konchar, Enrico Gei, Carlos Partida and Mohemed Elghobary.