FXCM letter to clients to repay negative balances

No. Just.....no.

To all customers of FXCM, just leave the place. I have friends who work as interns there, and they'll tell you that while FXCM is acceptable as a workplace, it is NOT a firm you'd want to purchase services from.

Corruption, scandals, lack of transparency....I'm not even going to bother listing the specific cases because they are so many. FXCM has the most lawsuits for any broker I know.

Yeah ? ...when has Jordan became A GOD ??

They can't repay the loan from Jefferies, thus the " self destruction & extreme bad public relation ". FXCM is over, if not bought by Q2/2014 - it's most probably going to chapter 11 ( Bankruptcy filling )

I am so glad I pulled my funds last friday

lol what a joke, FXCM gets a bailout and now they want to eat their cake too.

Very simple "DO NOT F*CKING PAY"

Banks get to take risks where they win if their trades work out well and taxpayers lose when they don't. Why should any of us bother then to control our risk? Gain Capital is apparently going to forgive negative client balances. FXCM is collecting from Leucadia. People who walked away from underwater mortgages are getting incentives to "buy" again. This is clearly a fail-safe country! Maybe there are no zero sum games here. Why do I have a sneaking feeling that somebody somewhere is paying? I must be stuck delusions from the past.

Nothing wrong in my opinion

I knew the lump in my throat when they took over my broker was bigger than just from switching brokers with no choice. Didn't like them in 2008 when I scratched them off my list. Like them even less now. Big scandals here.

But on this point, they do say "can't loose more than your deposit". If you have multiple accounts, some red, some green, would it not be right to combine them as "the" deposit?

Yeah ok wtf... sucks to have 2 accounts there atm

Sometimes it's hard to believe they're on the NYSE

Has their stock started trading again RB? I don't follow or trade stocks but the last I heard it was pretty much penny and still considered a very risky buy.

please do elaborate

Does anyone know who we should contact in the UK? Legal firm? or FCA

Any help would be appreciated. Surely FXCM cant get away with this `act of godl `clause

Is scandalous

Next week, it will go under a dollar.

They are taking a chance to see how much of the losses they can recover.

I would simply ignore them if I were to owe them money.
How will they in any case get the money from clients in countries where they have no jurisdiction . How do you get something from somebody who just lost everything??

The L Providers should also write this debt off . I am also of the opinion that there is a definite case in court against the SNB for removing the cap on chf in the manner they did.

A case of conspiracy or gross negligence could be on the cards. If an individual can sue a big company like Starbucks in the USA where the person accidently spilled hot coffee over himself ( and got burnt) then why not open a case against the SNB?

It only make sense to bring them to book for the misery they caused to thousands of people and organizations who lost millions as a result of their irresponsible actions.

Force Majeure events usually refer to war, strike, riot, crime, or events described by the legal term ‘Act of God’ such as a natural disaster, or other unforeseeable circumstances.

I would like to see them prove Gods existance in a court of law. Unforeseeable circumstances, if they could not see it then why should you be able to see it?

Then there is the question of the SNB's own actions. Their own mandate states a main objective is price stability. Did their actions bring about their objective, you decide.

As for selling on the debt to the sharks well let them as legally the debt is no longer yours it now belongs to the shark, See a thread on Facebook called " How to beat the bailiffs and banks. It is very enlightening.

https://www.facebook.com/groups/beatthebailiffsandthebanks/

Good luck to all.

lol

I dont have account with them never even thought to have accoutn with them, but what can they do if clients dont pay?

fxcm blows

I can't imagine the precarious situation and horrible feeling of all the bright eyes and bushy tails would be forex millionaires attracted by the "come on for a swim; the water is fine" slogan as perpetrated by the forex industry and forex marketeers who put on trade at 1:400 leverage and now owe the broker an enormous amount on top of what was lost in the account... and that was just their first trade...
Forex brokerage is insanely and obcenely profitable, no need to add insult to injury.

well there will be court summons and added interest..its the courts that is the problem

FXCM ,, Have someone heard what is saxo bank doing ? I know guy trading with saxo his Eur/Chf long was closed at 1,1000 - 2000 dollars . Then saxo have decided to
Average close price for all traders who were long id 0,9265 and they have called him and now he is -40 000 Dollars .. That is idiotic

I dont think they can win in court, no one should pay a dime to them, infact they should pay those who's Sl was not honoured.

FXCM will be a history in 3 months. Leucadia is going to cry.

Why? All the "Thieves of Wall Street" are on the NYSE!

Now, lets see if the false Regulators (NFA and CFTC) go after the new "Robber Bank controlled" FXCM and any other USA brokers that breach contract stipulations that the broker will NOT go after negative account balances, as the new FXCM is doing. Personally, I doubt they will because they do not "regulate" for the benefit of retail traders. They "regulate" against retail traders for the benefit of the Robber Bank MMs. And so long as the Robber Bank MMs got their profits from all the losing retail trades, they won't give a damn what happens to the brokers.

For sure, they are not going to go after a new FXCM broker that the thieving Robber Banks themselves now have a stake in, thru one of their vulture subsidiaries!

It is all about making sure the "Big Boys" at the top of the financial food chain get their pound of flesh. Nothing else really matters.

my account balance negative in 5 jan 2015, and i need not to trading again but there can not i stop trading and lost. and deposit again and my account lost again in chf action
profit no, lost and lost again yes in month january 2015 and i hope euro can down again again and my account lost and lost again in zero price for euro. and euro very weak can to price lower down under 1 price (for eurusd)

scumbags

I feel exactly the same way as you do. If CFTC was doing their job right, FXCM would not dare to ask customers to pay negative balances. In the first place, FXCM choose their liquidity providers who could not provide liquidity. How is that a clients problem?. I am not a FXCM client now but I used to be. They are the worst cheaters among the brokers. If you are making big money, they will freeze the platform, if you are losing big time, they will freeze the platform. They will not honor your hard coded stop losses etc. I left them long time ago. They were the principal conspirator in supporting NFA to do things like FIFO, no hedging and low leverage. And the good news is that they have to pay for it by going bankrupt.

I am a seasoned trader so I know that when leverage is kept low, client has to have plenty of spare money idle just in case. Because there is no segregation of client funds in US (and US is the only so called developed country who does not require client's money segregated), brokers use client's own unused balances to, would you believe, to play against client. I understand this game because I worked at PaineWebber and Credit Suisse for many years.

how about "negative balance adjustment" ?

few years ago, when price super fast, i ever get MC, and my account become minus, but later broker change it to zero, at trading history, they add some dollar with note: negative balance adjustment. i getting that situation twice, with 2 different broker,, FSA/FCA regulated, and another 1 only local regulated.

and how NFA regulated broker asking money to client? how about negative balance protection term ?

There would have been something just had they just disappeared, apart from all the indescretion no one is even mentioning the appalling management in place there who allowed this calamity to take place.

Their policy clearly states that you can't lose more than your deposit. As for transferring funds from another account, unfortunately I believe they'll have every right to do that as your accounts are linked to you as an individual, if it is an individual account (not corporate).

I'd ignore it. If you have money in a separate account, they'll take it and there's nothing you can do, but by no means pay a dime to them.

NEVER NOT BE AFRAID! lol
Trust no one.

Good luck to anyone still staying with fxcm. No one deserves these headaches. I for one am not giving them a penny. I joined them strictly based on their no-debit policies. False advertising all over their site!

Very simple if you get margined out on account that would require your account to be down to 20% . This is automatic ... So in reality you should be left with positive balance. This is no one's else's problem other then the provider of data to your platform . The platform failed to carry out a 20% margin call of account as it was designed to do. Not -20% . Dont pay a red cent people.

just send them a email saying f^&*k you..lol
criminals

Because LP´s didnt provide any quotes FXCM couldn´t close these trades.
But that´s their problem.
FXCM advertised with a "No debit balance policy".

For example
http://www.fxcm.com/uk/advantages/safety-of-funds/

Moreover, FXCM never mentioned a "Force Majeure event" clause in it´s product disclosure statement. Indeed it states that they not hold clients responsible for deficit balances during market gaps and volatile periods.

http://www.forexfactory.com/showthread.php?p=8018732#post8018732

And why should this be a force majeure event while 99.9 percent of the brokers are doing business as usual without taking a 300 million loan from a loanshark.

No reason to remit funds or pay anything.

"If after this transfer you still maintain a negative balance on your account, you are requested to remit funds immediately. FXCM accepts deposits by, debit card, bank wire and ACH electronic check. All options can be accessed via our www.myfxcm.com portal".

Maybe I am reading this wrong, but it seems to me that if after transferring funds from a clients positive accounts to help cover losses on their negative accounts, they are still in the RED, FXCM is asking for a direct payment from the client to make up the shortfall.

Seems to me they are NOT honoring their promise to NOT hold clients responsible for deficit balances.

"If after this transfer you still maintain a negative balance on your account, you are (requested) to remit funds immediately".

Interesting choice of word here.

If they were so sure they had a leg to stand on to receive direct payments from clients themselves to make up combined account shortfalls, I think it's likely they would have said "you are (required) to remit funds immediately.

I would tell them to shove their "(request)" where the sun gets no play

Don't encourage him. He's talking out his ass.

LMFAO!!! Yeah, great idea. Give it a shot. Let me know how far you get in ten years.

The blind leading the blind.

ECN is modern bad idea
first, come with cost.
and also ECN broker not "in contract" with LP, they connected to ECN pool, slippage often happen because at ECN pool, some monster can put illusive order and reject, and since LP not in contract, they free to deliver bid/ask price, and free to run away when bad thing happen.

different with DMA, broker directlly connected to LP, in contract, in agreement, so LP must process trader's order, and no commission to pay, and also offering what ECN can offer, variable spread, and DOM (Depth of Market)

ECN:
trader--> broker--> ECN network <--LP
DMA:
trader--> broker--> LP

so I work with the best broker in the world with guaranteed stop loss better to pay a fee than being indebted to the broker

exp. 1 http://prntscr.com/5wgg8g

sample order as you only lose what gets in stop you pay a minimal fee and this ensures that if the eurusd opens with a gap in 1.14 I'll just lose the value of 134 euros for a mini contract. taking into account the moment paraticado spred and higher up markets become more quiet. Example 2 If you order by an equal but not guaranteed stop asking less margin value but if the market opens with a gap on me I get negative example if a very strong movement can lose a lot with 2 euros I open a position without stop guaranteed but if the market goes against me I can lose EUR 500 EUR 1000 as it depends on a lot.

exp. 2 http://prntscr.com/5wgjic

FXCM is on the war path against its remaining clients, a letter has been sent to clients having good equity in their balances about substantial new margin requirements taking effect after close of trade yesterday. This is not GOOD for the clients... many clients' accounts will be robbed and clean up without them having any time to react.

FXCM is down under and remaining clients will be screwed to pay for their LOST! If you are client of FXCM, call them to demand explanation for new margin requirement, if only you can get somebody to answer your concerns!

Anyone thinking of paying FXCM for their negative balances should read this.

It is FXCM's policy to credit retail trading accounts to a zero balance when debit balances occur as a result of trading on FX or CFDs. One of the greatest concerns traders have about leverage is that a sizable loss could result in owing money to their broker. At FXCM, your maximum risk of loss is limited by the amount in your account. All accounts are tracked by our "Margin Watcher" feature. With the Margin Watcher feature, if account equity falls below margin requirements, the FXCM Trading Station will trigger an order to close all open positions.

example on my broker open a eurusd order in last Friday's market on Sunday opened against me my guaranteed stop margin was 50 euros but the market made a big move and my account appears negative EUR 300 after a few minutes when the system is one update I see so lost 50 euros imagine if I had not guaranteed stop I lost 50 euros plus 300 negative.

Segue um texto retirado de goforex.net e assinado por Jimmy Young.

Isto que o homem diz é mesmo verdade? Já alguém sentiu na pele uma mordidela destas dada por uma corretora?

Why do on-line FX brokers guarantee stops at all? The answer is simple; they make a lot of money from it. Only the on-line FX brokers handle stop loss orders such that a customer’s stop loss order is executed when the level is reached and not breached. In fact, in FX banking the etiquette is to not fill a stop until 3 points or so breaches the level

Common sense tells me people are leaving FXCM in droves. Without the business what else can FXCM do but chase those numpties with negative balances...

Traders should be very careful - no one wants to have their life savings at risk because of a broker that chases negative balances...At least one broker just announced a new thing: http://directory.forexmagnates.com/view-news/synergy-fx-shakes-up-forex-industry-announces-launch-of-hybrid-execution-accounts/2278

I say write to the FED for a bailout rofl

If they're not, they should be...

What happens when the next earnings comes out and value of the company drops the stock price below NYSE for compliance?

Delisting?

Then what? They hit the pinkies?

lol

They've literally got a credit card term loan, bailout.

Missed payments on this when how many of their accounts cannot be traded because of a below zero balance, and how many others fleeing markets for scratch n win lotto tickets, is almost inevitable.

And then who'd they liquidate to?

It'd be easier to collapse this bitch, re-brand and open new doors than would be to keep this pig afloat.

Re-branding will be inevitable after this PR disaster. Then they'll join the ranks of those other shitty brokers nobody has heard of. Sending out begging emails to clients not to withdraw their funds indeed. It just made them look even more desperate. The loan conditions will crush them. They are history.

And if the PR nightmare and the terms of the loan weren't enough....

http://finance.yahoo.com/news/fxcm-shareholder-alert-law-firm-153400238.html

Irresponsible action by the SNB ? why ?

Isn't it an irresponsible action by those who naively believe that there actually are free lunches ? That you simply buy eurchf at 1.2001 with max leverage and just wait for the magical account balance that will solve all your financial worries ? and with 0.000% risk ? come on, you're smarter than that...

As far as FXCM goes then they were doing one thing any broker should NOT do - Speculate.
They knew very well the unreal amount of stops below 1.2 and i'm sure they were smart enough to figure out what would happen IF this "unlikely" event should happen. But they speculated, they bet on the SNB. Removing the leverage in chf pairs would have been the solution...but, now it's easy to say all that.

Anyways, now that the air is out in CHF, and the unbelieveable negative yields you get from swiss gov bonds (up to 15 year bonds it's negative) i would think the franc is the most overvalued asset in this universe and the next. Let's see how it'll unfold within next years.

Refco flashback

first, luckily i transferred my fund from Alpari UK to FXCM last December, avoided the CHF crisis.
second, it seems like FXCM is not safe as well. i didn't execute any trades this month, so the margin problem won't effect my account.

But i'm worrying about my fund now, is FXCM will be the same end as Alpari?

Just to add 2c...

FXCM states you can't lose more than your deposit. They then demand repayment of negative balances because it's a "force majeure" event. The event was a central bank announcement.

Central banks make news announcements all the time, and spreads go nuts during some of them because of liquidity.

Haven't we all seen news drive price? ECB moved eur pairs hundreds of pips just last week. It's nothing new. Yet, knowing this, FXCM:
- made the promise about negative balances
- didn't protect itself (hedges, options, etc)

First rule of trading: protect your account. All traders know it. FXCM didn't. This appears negligent on the part of its executives. Why don't the creditors or anyone who lost there investment in FXCM securities sue them instead? There is clear legal precedent for piercing corporate protection.

These execs should be done in forex forever. I'll not keep an account in any firm where they have control.

Best wishes to all traders with accounts at FXCM.

Don't send them a single penny. FXCM is a bunch of scammers and crooks.
They have had more lawsuits filed against them than any other forex market-maker in America. I don't know why they're on the NYSE, they are just scum.

It is Fxcm who should be crediting traders accounts to there 20% margin cap on the accounts not the other way around . That is why it is there simple ...if it was not implemented then things would be different . Keep it simple and don't fall or be threatened by there bullshit.

Starbucks has a legal requirement to provide a safe environment to the public who is invited into its retail establishment.

A central bank is a cartel of private banks which exists for one purpose only, to protect and support its member banks. It does not deal with the public, just its member banks & has no similar requirement to a retailer. It is not even required to list its members.

The SNB had every "right" to do what they did, however, they would not have done it the way they did if they had not lost billions trying to defend the peg to the EUR.

They admitted that the did it suddenly without warning to prevent speculators for coming in (or getting out without losses.)

I'm sure they do not have warm & fuzzy feelings toward traders, or their brokers, whom they probably blamed for costing them billions.

Christine LaGarde tried to cover her self by saying "They didn't even notify me...", which I personally doubt. Why did she even mention it?

Even the Swiss banks are going to claim that they lost money, otherwise, it would appear that they had prior knowledge, which they well could have had.

Short version: Never bet the farm on a sure thing.

i know many people in the same trouble with saxo. can't imagine this can be legal. if it is how should single on client stay at saxo in the future!

https://www.intelligentinvestor.com.au/saxo-bank-screws-little-guy

Yep it's sick .. But i have also read on their websites .. That they have got clients who transfer their money in to the Saxo .. Still OANDA have make the best thing :-)

I agree. Oanda honored all of their clients negative losses, and are using this opportunity to gain new business. Good for them. They deserve it.

FXCM's French clients did so much noise on the forums and created so many groups to prepare an counter-attack that FXCM announced yesterday that they will forgive their negative balance.

Is anyone aware of such Groups of FXCM's clients abroad? (Russia, China, Japan, US, rest of Europe?

http://forexmagnates.com/fxcm-inc-unveils-revised-terms-leucadia-agreement-client-funds-25/

"While there are reports that some clients are getting their negative balances cleared by FXCM’s team, this comes as no surprise in light of the company’s official position that it will be treating negative balance issues on a case by case basis.”

Well clearly it has not been the case since all the retail clients in France have been (privately) confirmed their negative balances to be reset to zero. I believe it is the same for German customers.

FXCM has no official position on such matter and doesn't work on a case by case basis.

The absence of official communication can only be explained by the risk to see both US and UK based clients disputing a difference of treatment based on clients location, which clearly looks like Unfair Business practices.

Regarding the validity of the Force Majeure, the chances of FXCM on this matter are very slim and one should always consider what falls under mere propaganda or legal rights.

Hi Everyone,

Here is the press release we just issued:

FXCM to Forgive Majority of Clients Who Incurred Negative Balances

NEW YORK, Jan. 28, 2015 (GLOBE NEWSWIRE) -- FXCM Inc. (NYSE:FXCM), announced today its decision to forgive approximately 90% of its clients who incurred negative balances in certain jurisdictions, on January 15, 2015 as a result of the Swiss National Bank announcement on that date. FXCM will notify the applicable clients and adjust applicable client account statements in the next 24-48 hours. "FXCM worked diligently to reach this decision and we are extremely appreciative of our clients for their patience and loyalty as we worked through this," said Drew Niv, CEO of FXCM.

The SNB announcement, extreme price movements and the resulting lack of liquidity were exceptional and unprecedented events causing many market participants to incur trading losses. These events were unforeseen and beyond the control of FXCM.

FXCM will also notify certain clients (such as institutional, high net worth, and experienced traders who generally maintain higher account balances) requesting payment of negative balances, pursuant to the terms of the FXCM master trading agreements. This group represents approximately 10% of clients who incurred negative balances which comprises over 60% of the total debit balances owed.

Read the full press release: FXCM to Forgive Majority of Clients Who Incurred Negative Balances (NYSE:FXCM)

As a publicly traded company, please understand there are some things which I can't discuss until the information is ready for release on a wide basis so thanks for your patience. Those of you with a negative balance should be receiving an email today.

Jason

90% is no good jason..tell your bosses to up it to 100%.


And pleaaeeeeeaasseee don't use the word 'forgive'..there's nothing to forgive cos it is your policy to zero negative balances..have you even read your product disclosure statement pg 29?

forgive? was it crime by clients to trust you guys?

I hope every one withdraw money from this arrogant thieves.

Hello everyone,
Just to give you all some perspective on how fxcm seems to be handling things: I had an account balance of approx EUR 100k and ended up with a negative balance of more than 800k, which has now been cancelled and reset to zero. I am not a "high net worth individual" by any means, but I guess my investment (and loss) was certainly above average. So many thanks to fxcm for honoring your negative saldo protection guarantee without any fuss despite the unexpected scale of the loss - it has lifted a deadly weight from my soul and spared my family a lot of grief!

no offense, but can you give us some proof to confirm that you're not an fxcm employee or anyone affiliated with fxcm?

Weve seen the true color of fxcm in the past month at least, so their crebility during difficult times is questionable now.

Even jason rogers isnt doing any good to this comminity now by avoiding straightforward questions.

Hi Everyone,

I know there have been a lot of questions over the past couple of weeks some of which I'm unable to answer until they are available for wide release, but our CEO Drew Niv held a Q&A with Forex Magnates that will help answer many of them http://forexmagnates.com/exclusive-fxcm-inc-ceo-drew-niv-discusses-firms-future-after-the-chf-crisis. I will continue to provide more answers to your questions as I am able to.

What happened on January 15th after the SNB announcement? What was the immediate impact of the SNB announcement on the company’s systems?

At the time of the SNB announcement over 3,000 FXCM clients held slightly over $1 billion in open positions on EUR/CHF. Those same clients held approximately $80 million of collateral in their accounts. As you know this was the largest move of a major currency since currencies started floating 1971.

The EUR/CHF move was 44 standard deviation moves, while most risk management systems only contemplate 3-6 standard deviations. The moved wiped out those clients’ account equity as well as generated negative equity balances owed to FXCM of over $225 million. We believe that the FXCM system operated properly during this event.

The caveat of our no dealing-desk execution system is that traders are offset one for one with a liquidity provider. When a client entered a EUR/CHF trade with FXCM, FXCM Inc. had an identical trade with our liquidity providers. During the historic move, liquidity became extremely scarce and shallow, which affected execution prices. This liquidity issue resulted in some clients having a negative balance.

While clients could not cover their margin call with us we still had to cover the same margin call with our banks. When a client profits in the trade FXCM gives the profits to the customer, however, when the client is not profitable on that trade FXCM Inc. ends up having to pay the liquidity provider.

FXCM ended with a regulatory capital shortfall. Accordingly, FXCM needed to get a loan to cover this balance, which it did. For anyone that still thinks FXCM is running an FX dealing desk, we have now demonstrated that such is not the case.

Why do you think many people traded EUR/CHF with FXCM?

Because we are a no dealing-desk broker and offset each trade one-for-one with our liquidity providers, and only make money on trades not customer losses. We published a study a few years ago called “traits of successful traders” that looked at FXCM traders over a long period of time and their general behavior to find what was destructive behavior to stay away from and what worked for clients.

The study focuses on what the majority of profitable traders did to increase their odds of success. What the study found was that traders who traded during quiet range-bound market hours like Asian hours OR that traded rang- bound low volatility currency pairs tended to be more profitable.

Obviously many of our competitors who are on the opposite side of their clients’ trades did not find this trade to be helpful to their bottom line, as they lose money when traders profit. We saw many of the dealing desk firms begin to increase overnight rollover cost as well as raise margin requirements to get these trades off their system and that’s why FXCM and other STP brokers had much bigger exposure.

Why did FXCM require an emergency loan with such tough terms?

As a regulated broker we are required to notify our regulators in a timely manner when any event occurs that may be deemed sensitive to clients. When we notified the regulators, they required FXCM Inc.’s regulated entities to supplement their respective net capital on an expedited basis.

We explored multiple debt and equity financing alternatives in an effort to meet the regulator’s deadline. The deal we ended up doing with Leucadia was the only deal that could and would happen in the very short timeframe we were given by the regulators. The CEO and the president of Leucadia were here in the office working on the deal.

It was a tall order for someone outside of the FX industry to come in and write a $300 million dollar check. This was the type of thing only top management could do. But they see the sustainability of FXCM, and that was everyone’s end goal. We really are very thankful to Leucadia. The deal enables us to live and fight another day and gives us time to build shareholder value in the future.

You said you plan to pay back the loan with proceeds from sales of non-core assets so what are non-core assets and will that be enough?

We announced last week that we anticipate that with the proceeds from the sale of some non-core assets and continued earnings we can meet both near and long-term obligations of our financing, while preserving the strength of our franchise. It’s widely known and understood that FXCM’s core business has always been retail FX; It is the majority of FXCM’s revenue.

However, over the past few years, the company has spent over $250 million dollars making strategic acquisitions building up our non-core businesses, mainly the institutional side as we tried to diversify the firm. We are now looking to sell some of those non-core assets; But, we are not in a rush and are looking to get the highest valuations for these assets.

We are considering closing or selling smaller regulated entities that require large sums of capital requirements, but that offer increasingly low return on capital. The latter move allows us to free up significant amounts of cash that is currently trapped. We believe that in the near term we can pay down a majority of the loan. That’s our goal.

What happens after 90 days according to your agreement with Leucadia?

The agreement says we need to pay back $50 million of the loan along with $10 million in fees in 90 days. If we don’t pay that $60 million, we will be assessed an additional $30 million in fees when the loan is due in 2017. So we are going to pay our $60 million and hopefully more in 90 days and then go from there. To be clear, the financing does not force us to do anything at 90 days.

Will you be selling FXCM?

I absolutely do not plan on selling FXCM. Like I said we will be selling non-core assets but no I don’t plan on selling FXCM. That is also why we implemented the shareholder rights plan to prevent a hostile takeover. FXCM has been independent for over 15 years and we intend to stay that way.

Are client funds safe with FXCM?

Yes. As we have said, we believe FXCM’s systems operated properly during this 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 it operates. The financing we received from Leucadia has strengthened our balance sheet and gives us the opportunity to grow our core business. With Leucadia, our pockets are even deeper and we aren’t going anywhere. Additionally, all of our regulated entities except the U.S. 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 CAD.

What are the relationships like with your liquidity providers after this event?

Many of these relationships are long-standing relationships. The entire industry took a hit here. They understand what happened. Most everyone halted trading in EUR/CHF, but half of our liquidity providers kept providing prices in all other pairs the entire time. Half of the LPs did stop pricing FXCM on Friday January 16th, but most have returned. We presently only have two providers that have not yet returned, but we are optimistic that they will soon return. There is still plenty of liquidity on the platform. Most banks and other liquidity providers have been working very closely with the FXCM team.

Where do you see FXCM in six months from now?

We will be well on our way to paying down the loan and continue to grow our core franchise. FXCM still has the best platform for retail traders, we still provide the fairest and more transparent execution in the business and we have a slew of new trading indicators and applications that no one in the space is even considering offering their clients. We’ll still be here; We may just look a little different. Here are a few things we are working to get out in the next six months:

Single Share CFDs – We are going to be offering the top 200 or so most traded US, UK, French and German stocks. We are going to offer these shares on the equivalent of NDD in FX.

Improving CFD execution – Sharpening execution capabilities to match some of the benefits of our FX capabilities for Index and Energy CFDs to remove restrictions on stops and limits, allowing APIs, along with tighter spreads.

Market Depth in FX – clients will be able to see the depth of liquidity which will provide them more transparency with execution quality and allow them to make more informed trading decisions.

Real Volume indicators – clients will have a real volume ticker of all trades done on the FXCM system, which will show clients’ actual order flow; they can see directional volume, so long, short, net or total volume as well as balance on volume per instrument; and finally we have an indicator to show the ratio of real volume divided into transactions per period. These indicators will let clients compare our trading activity against other independent providers who also publish volumes like the CME, and clients will be able to compare execution.

Sentiment Index – We will be providing FXCM’s client sentiment data in real-time as a default on the platform so clients can see where the rest of the clients are.

These software updates and platform features are bringing much more transparency to the retail FX market aimed at improving the client experience in the market.

With your stock price so low, is that an indication of the health of your company?

While it is true that FXCM’s stock price dropped after the events of January 15th, we do not believe that the present stock price is indicative of the health of the company. The stock price does not impact our day to day operations as a company.

With the injection of cash from the Leucadia financing, the core retail business is functioning completely as normal. We have excess regulatory capital in all our regulated entities and never had to pause trading or interrupt client’s trading experience. As we announced in our business update, daily volume on the retail side was on pace to set an all-time company record.

Why didn’t the dealing desk brokers have these types of losses?

A dealing desk broker does not have offsetting trades. If the customer is long a trade the broker is short that trade, so when the customer makes a profit on a trade the broker loses. When the customer loses on the trade then the broker is profitable.

Obviously on January 15th most clients lost money so the dealer was very profitable. Even for clients that blew through their stops and had negative balances with these firms, the dealer doesn’t have a liquidity provider that it owes money to. They can essentially act like the negative balances never happened and enjoy their profits.

What is FXCM changing with regards to their risk management systems?

The primary change we will be making is removing currency pairs from the platform that carry significant risk due to over-active manipulation by their respective government either by a floor, ceiling, peg or band. Given what happened with EUR/CHF the industry is now looking very hard at any potentially similar issues, especially given the increased geopolitical risks in Southern and Eastern Europe.

We will also be raising margin requirements for other pairs as well. Some of these changes will be permanent while others may change as geopolitical risks change. The pairs we are removing from the platform were not material to our volume or our revenue. Some of the currencies we are removing include DKK, SGD, HKD, PLN and CZK.

FXCM made some material changes in margin requirements for clients. Are those changes permanent or temporary in nature?

When you look at some of the changes we made to margin requirements, look at them in three different categories: 1. Some of the changes we made were required by regulators, and therefore we had to comply with these changes. 2. When you look at emerging market currencies, the banks and our liquidity providers were raising margin requirements to eliminate any potential risk of large gaps. 3. Previously liquid Western country currencies, like the DKK or CHF, which now carry risk because they are manipulated currencies, have become less liquid.

Despite what the media thinks about leverage, we know the clients like it and want more, it’s the number 1 or number 2 request our sales staff has been getting the past week. We understand the importance of this to our clients but we just need to be smart about it moving forward.

What is Black Thursday’s long-term impact on the retail foreign exchange industry? In what ways has it changed the direction the industry is going?

Banks are raising their margin requirements, too. A lot of these currencies that carry any type of geopolitical risk with them are going to lose support and liquidity. Investors always had little faith in emerging market currencies but always believed in Western countries’ currencies even if they were manipulated in some way, but that’s gone.

Switzerland is a Western country and if they can pull the shenanigans they did with their currency, what’s to say other western countries won’t do the same? The market is going to be very sceptical as they can only stand to lose; The risk is just too high now. It’s too bad really as these pairs historically had low volatility, were range-bound and were very profitable trades for clients.

- See more at: http://forexmagnates.com/exclusive-fxcm-inc-ceo-drew-niv-discusses-firms-future-after-the-chf-crisis