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#1 05-06-2019 10:06:23

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3068

5 years ago, brokers killed the forex

5 years ago, brokers killed the forex

New rules by regulatory agencies are not the threat to the forex sector - forex brokerages have already killed off the sector back in 2014. This was suggested by Ronald Finnburg, Sales Consultant at Cappitech, during a speech at the iFX conference this year in Cyprus, on the topic of trends we can expect to see this year.

Last year, brokers were subject to many new rules by regulatory agencies aiming to eliminate or reduce bad business practices while protecting the interests of traders. As a result, brokerages have had to hire more personnel to implement these new rules and to be aware of the latest legislation.

Nevertheless, the question remains: are all of these new rules going to destroy the sector? Finnburg believes that shady practices and dishonest advertising tacticts killed off the forex sector back in 2014. Today, brokerages have to expand their product offer so that it includes indexes, shares, CFD products, and more... 

R. Martenstein, Head of OOS Consulting says this is true, adding that these new rules were introduced in response to the practices used by brokers in the industry.

Rather than shift the blame to the agencies that implemented these new rules, Martenstein says brokerages need to take it upon themselves to improve the entire sector, as well as the ways their firms do business with their clients. 

Foreign brokers are the new trend

Because of the harsher rules in Europe, some unscrupulous brokerages have been trying to steer their clients to their other foreign-based operations. These foreign countries fall in 2 groups: those in reputable nations such as Australia, and those in remote isolated territories such as Belize or Nevis.

In addition, Martenstein says that companies that set up operation in one of these latter countries are solely considering the near-term, not a long-term relationship with its traders.   

Australia will soon no longer be an option for European brokers

Aside from being a great holiday destination, Australia's also the leading destination for European brokers who want to shift their clientele abroad. This is because - up until now - regulations have not been very strict.

But, Australia's regulatory agency (the ASIC) recently cracked down on brokerages who sign up non-Australian clients, especially Chinese ones. 

Finnburg adds: maybe I'm crazy, but with Trump's current trade war with the Chinese, as Aussie's are right in the middle, geographically speaking, perhaps Australia just wants to keep them out so that they don't become involved in this war, which could lead to increased import-export duties and taxes for the nation.

"Anything worth having is worth going for - all the way." - J.R. Ewing



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