20 January, AtoZForex — Everyone is talking about what is happening in the market, many people are crying off their losses and many celebrating their profits. But for Forex brokers the situation is quite unorthodox as well. The usual safe heaven OTC brokering seems like it is no longer applicable as many brokers lost substantial amount of funds in yesterday's SNB 1.20 rate scrapping announcement.
A few days has passed, and the amidst the turmoil retail traders are in panic, questioning whether their broker has been impacted by the Black Swan event or not. If so, what's the damage and will they be able to retrieve their funds eventually? Having this in mind, the following list is an one stop review of what brokers are saying on what to expect after the Swiss Franc:
Who is responsible for the madness?
ActivTrades officially reported that the firm had a contingency plan at hand to prevent the interests from such events, hence it was able to protect the entire firm: “ActivTrades had already anticipated the possibility of such events. Consequently, we decided at the time to increase the margin required on our CHF pairs by a multiple of 16. Thanks to this measure ActivTrades was able to protect its clients by substantially limiting their losses. Hence by protecting our clients’ interests, we protected the interests of the company as a whole”
Admiral Markets Group communicated in an official statement that the SNB did affect their operations, although the repercussion was minor: “We want to reassure you that the effect is limited allowing the Group and its regulated legal entities to continue providing services to its clients.”
Advanced Markets announced that they withstood the SNB crisis, as the CEO commented: “We came through this period of unprecedented volatility cleanly and we’re on very solid ground and expect zero or minimal client losses.”
Alpari RU exhibits their tenacity, as last week occurrence had no impact on the business, considering that they have announced a remarkable offer: “We do our best to provide our clients with more favorable trading conditions. On January 21, 2015 we start our unprecedented special offer. There are no minimum deposit requirements on any trading account. Now you can trade on any type of account you like.”
Avatrade reported in a statement that they persevered from the SNB occurrence: “Avatrade is pleased to confirm that yesterdays SNB statement and Swiss Franc volatility had no material effect on the companies strong financial position”
AxiTrader announced the firm’s stability, in an official statement by CEO Goran Drapac: “The overall financial impact on AxiTrader has been limited and our regulatory capital and cash resources remain above the regulatory requirements. Customers can be assured that Client Funds remain segregated and business remains as usual.”
BMFN stated several quotes on their official website signaling resoluteness: “BMNF confirms, no client losses and full stability following Swiss black swan. BMFN, all smiles as business continues as usual.”
City Index released an official statement bearing positive news for their parties: “we would like to take the opportunity to reassure our clients and confirm to the market that City Index has not suffered any material impact as a result of yesterday’s volatility and our financial position has not been affected. It is very much business as usual for City Index and our global client base.”
CMC Markets commented that it is business as usual, in their official statement: “Like many of our competitors, CMC Markets sustained some losses, however, the overall impact including possible bad debts has not materially impacted the Group. It’s business as usual.”
Darwinex announced quite a different statement, mentioning that they are not affected by the Swiss franc’s movement and published the following official announcement: “Looking forward, retail FX will never be the same after this. Hopefully this is a lesson we all, including traders and brokers, but also regulators, learn from. In our humble opinion, the days of OTC (retail) forex are possibly counted.”
Dukascopy published their official statement, and provided reassurance to their clients: “Dukascopy Group announces that it has safely passed through the CHF dramatic price shift. It was achieved thanks to advanced execution technology, careful risk management policy and reduced leverage on EURCHF till level of 1:10."
Easy-Forex found a creative solution to report their unaffected status post the SNB announcement, namely through producing a video: “Easy-forex was not affected due to its strong risk management systems and our clients are safe due to our guaranteed stop losses and negative balance protection. We wish to reassure clients that at easy-forex it’s business as usual and we remain committed to client safety through numerous measures including segregated funds and full compliance with our regulatory authorities.”
Etoro experienced minor issues after the Swiss Franc, as stated in their official statement, they are already fully functioning: “We are back to business as usual with our system fully operational, after a few hours of suspending trading for all CHF crosses yesterday. All deposits, withdrawals and orders are being executed in a fast and orderly manner.”
ETX Capital announced their stability, in a brief and concise official statement: “ETX Capital is pleased to confirm that its financial position is unaffected following the extreme movement in the price of the Swiss Franc yesterday.”
EXNESS endured a slight loss, which did not affect their client funds, despite this predicament they are fully operating again: “At the end of the day, EXNESS' total losses amounted to less than 1.6% of the company's capital. We would like to clarify that these losses only affected EXNESS' own funds - this in no way whatsoever affects clients' funds. In all other respects EXNESS is providing services in a normal manner and continues to honor all of its obligations in full.”
Forex Broker Inc. duly reported their unaffected status after the SNB announcement, in their CHF Press release: “ForexBrokerInc would like to inform its clients that their funds and positions have not been affected. ForexBrokerInc has experienced no negative impact and we have taken measures to protect clients’ funds and have thankfully managed to limit any losses.”
FXCM was lingering on a thread, however the firm received 300 million aid from Leucadia for their resurrection: “Under the terms of the agreements, Leucadia is investing $300 million in cash into FXCM in the form of a $300 million senior secured term loan with a two-year maturity and an initial coupon of 10%.” Interestingly, FXCM hinted to be the buyer of Alpari UK, brief after the $300 million lifeline.
FXDD experienced a slight aggravation and is reportedly already operating at full, according to their announcement: “Despite these extraordinary market conditions, FXDD Global’s trading operations remain stable and we remain fully operational and open for business.”
FXOpen responded by suspending CHF currency pair, aside this action they reported to be operating normally: “We would like to reassure all our clients that after the unprecedented movements in the Swiss Franc on Thursday 15th January, the Company is still very well capitalised and is operating its business as normal. With the exception of CHF currency pairs.”
FxPro reported negative client balances but claimed usual business with the following announcement: “While the company has been affected by the events of what is now being called Black Thursday, FxPro remains fully operational and solidly capitalised, as ever. It is business as usual: deposits, withdrawals and the entering of positions continue as on any other trading day. The funds of our clients remain segregated and protected.”
FX Primus risk management strategy sustained their business, as commented in a recent interview: “Fortunately the risk management protocol we’ve had in place since Day 1 of business has held up during this unprecedented event.”
FX Solutions belongs to the City Index group, and is currently operating fully. Evidently, the firm took measurers, as announced on the website: “Due to the unprecedented volatility in CHF markets, we are widening our spreads”.
FXTM reported in an official statement that they are running business as usual: “We would like to assure our clients that our capital adequacy ratio has not been affected; any losses incurred have been absorbed and our clients’ funds remain protected. Any negative balances which have arisen are in the process of being corrected and business will continue as usual.”
Gain Capital’s Forex.com commented no risk to the company to its clients and investors in an official statement: “Based on its current market and credit exposure, GAIN does not expect today’s market events to have a material adverse financial impact.”
GKFX did not only survived the crisis, post the SNB announcement they even reported to acquire financially suffered brokers: “In light of recent events, following the actions of the Swiss National Bank, GKFX Financial Services Ltd is exploring the possibility of acquiring several brokers who have unfortunately suffered financially.”
HotForex officially stated that businesses are fully operating again, while having no impact from the Swiss Franc: “We would like to reassure you that HotForex is operating as normal, and was not affected in any material way. Our strict Risk Management procedures minimized the impact of this event.”
HY Markets announced to have a stable financial position, in their press release: “We’d like to confirm that our financial position is unaffected following the extreme movement in the price of the Swiss franc on last Thursday, January 15th 2015. We want to reassure all our clients that our systems, controls & policies properly manage the firm’s position & credit risk.”
IBFX belongs to the TradeStation Group, and from the official announcement it is clear that they did not suffer from the crisis: “today announced that the Swiss central bank’s decision announced yesterday to abolish its three-year-old policy of capping the Swiss franc against the euro has had no material negative impact on the financial condition of its IBFX/TradeStation Forex or IBFX Australia Pty Ltd operating subsidiaries.”
IC Markets faced no deficiencies, as they stated in an official press release, to be fully functioning again: “In the wake of unprecedented market events caused recently due to actions of SNB, we would like to reassure you that our robust risk management processes has helped us to continue Business as usual.”
IG initially endured losses, however this is not a predicament for the firm, as it has been stated by the firm: “IG Group Holdings plc believes it is appropriate to provide an update on the negative financial impact to the Group. The precise level of the impact will be partially dependent on the Company’s ability to recover client debts, but in total it will not exceed £30 million, from market and credit exposure. As scheduled, on 20 January 2015, IG will present its results for the first six months of the 2015 year, and will provide an update on progress on its strategic initiatives.”
Interactive Brokers reported in a press release that they lost a respectable sum of money, however compared to their net worth is insignificant: “Due to the sudden move in the value of the Swiss Franc ("CHF") yesterday, several of our customers suffered losses in excess of their deposit with us. Such debits amount to approximately $120 million, less than 2.5% of our net worth”
IronFX reported strong risk management left the company not affected by announcing the following officially: “IronFX was not affected by these events due to our strong risk management systems and procedures and we continue complying well with our capital regulatory requirements under all regulatory bodies we have licenses. We would therefore like to inform our clients that we continue conducting our business as usual.”
JFD communicated their remained strong position after the SNB announcement: “JFD’s balance sheet remains very strong with a Capital Adequacy Ratio (CAR) of 24.5% set well above the minimum required of 8%.”
LMAX reported business as usual, and the CEO commented the following: “Thursday was a difficult day for the FX marketplace and our clients following the unprecedented volatility in the Swiss Franc. Our strict risk controls and robust technology ensured that LMAX Exchange suffered no significant financial repercussions. We expect business as usual for our clients on Friday with no change to our international operation in London, Hong Kong and Tokyo. The benefits of exchange style execution and limit order book transparency were clear to see after the general market dislocation created by the SNB announcement.”
London Capital Group reported that the Swiss Franc losses occurred but not very substantial in an official announcement: “the impact on the company’s balance sheet from market and credit exposure will be dependent on its ability to recover client debts, but in total it will not exceed £1.7m”
MahiFX published an official statement, comforting their clients of no fund loss: “While the volatility in the currency markets claimed a number of brokers, for MahiFX customers it is trading as usual. All retail client funds are fully protected and held in segregated trust accounts with the National Australia Bank Ltd (NAB). NAB is an AA rated bank that is regulated by the Australian Prudential Regulation Authority.”
Markets.com withstood the market developments post the SNB announcement, as officially stated: “This extreme volatility didn’t impact the firm’s strong financial position. Thanks to the company’s robust risk management policies, the Company enjoyed a profitable trading day in yesterday’s session and didn’t have any negative impact from the Swiss Franc’s extreme volatility.”
MIB endured a minor impact, as businesses remained functioning according to their statement: “Our Forex customers on all of our integrated platforms, including our own MBT Desktop Pro platform, cTrader, and MetaTrader, saw almost no lapses in trading availability. There were definitely fast market conditions in pairs like the USD/CHF and EUR/CHF that caused price gaps for some customer orders, but overall, the impact was immaterial”
Monex Group faced a negative client balance, however in an official statement it says that the impact is minor: “This client negative balance will have no material negative financial impact on the consolidated performance and the business operations of the Company.”
OANDA published an official statement, relieving their clients with the following news: “OANDA did not re-quote or amend any CHF cross client trades. We even took the further step of forgiving all negative client balances that were caused when clients could not close out their positions fast enough”.
OctaFX announced to be back in business as usual in their press release: “OctaFX remains fully reliable and solvent despite the recent events. All the trades are performed according to the operational company standards. We are proud to confirm our stability and integrity”
One Financial Markets published on their website a news article, saying that they remain in full operation: “We take a responsible and professional approach to risk management throughout our business and clients can be confident they are dealing with a financially sound company, despite the devastation that others have experienced. It is very much business as usual at One Financial Markets.”
Orbex announced to be fully operating again to the firm’s standards, in an official release: “We would like to take this opportunity to assure you that despite the extreme volatility the markets have experienced over the past few days, which has cast its shadow over many forex brokers, we are still proudly serving our clients at full capacity and our operations have not been negatively affected.”
Pepperstone briefly reports that their business as usual in an official press release on the website: “At Pepperstone, our strong financial profile and risk management systems mean that the business is operating as usual and has been largely unaffected by these events.”
Plus500 is one of those commenting no risk for the company with an official statement to its investors: “no material impact on the Company’s financial and trading position. The Company is experiencing a profitable trading performance today and believes this is testament to the robustness of its risk management policies”
Saxo Bank released an official press release on their website, announcing the following: “In light of the recent volatile Swiss Franc currency movements, we would like to inform you that Saxo Bank and its subsidiaries are well positioned financially to conduct our on-going businesses globally.”
Sensus Capital Markets faced a minor loss, despite the firm is already fully operating: “There were minimal losses, but the capital buffer was adequate to absorb those. Sensus remains a strong player in the industry and will continue to service you with our high standards as always”.
Swissquote also made an official announcement about the situation: “Today’s drop of up to 15 percent has left the clients with a negative balance and has prompted the bank to activate a provision of 25 million CHF.” and the bank continued that “this provision will influence the results in the first half of 2015, without affecting the profitability and solidity of the bank.” and ” the bank will have a core capital ratio (Tier 1) of around 17 percent”.
ThinkForex took immediate action by limiting the trading of CHF markets, as explained in their official statement: “We continue to hold capital well in excess of all ASIC regulatory requirements, and confirm that trading on all CHF markets is currently “close only”. Clients with existing open positions are free to hold these positions, and can close them at their convenience. As markets return to normal, we expect trading on CHF markets to resume again. We will keep clients notified in due course.”
TradeStation Group reported in the same press release that they were unaffected by the market after the SNB announcement: “Swiss central bank’s decision announced yesterday to abolish its three-year-old policy of capping the Swiss franc against the euro has had no material negative impact on the financial condition of its IBFX/TradeStation Forex or IBFX Australia Pty Ltd operating subsidiaries.”
TradeView communicated in a brief manner that their business is running normally: “We are proud to say we were able to calmly navigate the rough waters during yesterday’s Swiss storm.”
Varengold Bank officially announced that their business was not affected by the SNB announcement: “Varengold Bank AG would like to confirm that the extreme volatility experienced yesterday in the currency markets did not affect the financial stability of the bank or it’s clients.”
Windsor Brokers explicitly reported that the SNB crisis did not affect their businesses: “We have reassured clients and business partners that trading operations were not affected and that we continued to conduct business as normal. Our risk management policies have helped us resist tough market conditions and solidify our processes over our 26 years of experience in the financial markets.”
XM released a official press announcing that they did not got affected by the recent SNB crisis: “XM would like to assure its clients that it has not been affected by the SNB debacle. XM would like to remind its clients that it has always offered automatic negative balance protection. XM will continue to offer automatic negative balances this as a commitment to our loyalty to our clients especially in turbulent times like the recent unusual movement of the EURCHF.”
XTB reported to remain unaffected after the SNB announcement, in their official statement on their website: “This is just a quick message to let you know that it is business as usual at XTB. We know that after the SNB announcement yesterday, a lot of brokers are under pressure. We are happy to say at XTB that we have not been left exposed by the Swiss Franc movement. We put this down to our effective risk management strategies and responsible leverage rules.”
We are convinced that Forex Brokers After Swiss Franc will never be the same and that there is a lot to learn from this issue.