The Cyprus EU bailout – will it affect FX brokerages?

I’ve been watching the latest developments in Cyprus as I’m sure many other traders have been. Over the past year, you have seen FXCM’s director of government affairs Charles Delano and I talk at length about safety of funds after the MF Global and PFG Best situations, and events in Cyprus continue to highlight how important it is. There have been reassurances from brokers about the safety of client funds but a true test would be to request a withdrawal to ensure the bank account holding client funds truly is outside of Cyprus. I hope everything works out in the end for customers to retain their full funds.

The transparency of a broker’s finances, particularly how much excess capital they have on hand, is important to know in events like this to see if they can sustain the type of hit they will take as a result of the bank levy and continue normal business operations. FXCM is a publicly traded company on the NYSE and our financial information is listed on our website http://www.fxcm.com/about/financials-performance/. As of September 30, 2012, FXCM had $230 million in our own net cash available.

Why does anyone contemplate trading with these brokers in Cyprus? Here's one, you wonder why it has any customers beyond those wishing to wash their loot..


http://www.marketwire.com/press-release/xemarkets-awarded-as-trading-platform-with-best-execution-10th-china-guangzhou-international-1767898.htm

Hi Jason, I've been suggesting that safety of funds is the number one consideration for FX traders for some time, IMHO this event will see the end of the FX industry in Cyprus which, let's be honest, is not the operation many think it is. You could be trading with a company that is simply a front for laundering flight money or dirty cash. The deafening silence from the FX brokers in Cyprus should have many customers rushing for their funds.

How can they guarantee this, will they be making up the difference for affected customers? Surely if for example FX pro has 10 mil lodged they've just lost 1mil of it if the policy becomes reality?

And Mr Leaprate, where are the direct quotes from Alpari, FX pro, FXCC, EToro etc etc? Third hand 'messages' count for fukc all thanks so if you've got nothing valuable to contribute, other than useless churnalism to get a few hits, keep your nose out eh? Come back when you've got some news.

I've voiced my concerns regarding some of these fx firms in Cyprus for over a year on this site.

Oh and mr Leaprate, can we have those direct quotes now? You know the ones you alluded to over the weekend? As try as I might I just can't see them amongst the press releases they normally inundate me with. Thanks in advance