What about FXCM UK? What is going on?

Can anyone confirm what is the future of FXCM UK?

Hi Jeff,

While part of FXCM's settlement with the NFA and CFTC was to close our US subsidiary, there will be no changes for clients of our other global entities such as FXCM UK and FXCM Australia.

Since FXCM US has not been a contributor to overall profits for the firm over the past few years, FXCM will target significant cost cutting by closing the US entity. Specifically, withdrawing from this business will free approximately $52 million in capital. FXCM will use the proceeds from any sale of the US accounts, as well as the large amount of regulatory capital currently tied up, to reduce the balance of FXCM's loan to Leucadia. With the reduction of this loan balance, along with sales of non-core assets that were previously announced, FXCM could be in a position to fully pay off the Leucadia loan before the end of this year.

With this exit, FXCM will be in a better position to service our international customers and focus on our profitable subsidiaries including FXCM UK. It's also worth noting that funds held with FXCM UK are protected for up to £50,000 per client by the Financial Services Compensation Scheme.

FXCM's full financials can be found here: http://ir.fxcm.com/
We will announce its Q4 and Full year 2016 financials in the next few weeks.

Is FXCM UK doing business Fair with its clients?
Are you trading against the customers as you did in the USA?



Here's how FXCM's petty scam worked. So, around the time of 2006 - 2008 the dealing desk model of trading against customers was getting old. Too many complaints, and too much competition. Finally, FXCM settled a lawsuit for something a genius lawyer labelled 'assymetric price slippage' which is high paid lawyer lingo for screwing the customer. The only thing assymetric about the slippage was the ass, that is, customers always took it in. You think that this is tongue in cheek humor, but this is how FXCM ran their business. The scam sham company they setup to trick regulators they sarcastically named "Effex" a full phonetic spelling of FX. If FXCM was really professional they could have resorted to naming it something regal, such as The Sapiano Organization or Wellington Capital Group, LP. - the name use "Effex" shows how petty and sloppy FXCM's management is. I mean, some people on Wall St. have that sense of humor. But, customers don't think it's so funny when they're losing money on positive trades. FX is difficult enough - and the fact that FXCM would resort to petty tricks like reversing positive trades in your account weeks after the profit was booked, it made for many angry customers. Yes, they did that. And worse, much worse.
Anyway, so at some point FXCM knew they couldn't perpetuate their dealing desk operations (trading against the customer) at least in plain sight, which they were. So what they did, they created a model that was truely, STP, or sending orders directly to the banks. However, what they did - in agreement with the banks, FXCM's order flow was 'tagged' electronically, and sent straight into the new fancy dealing machine that was now a super robot on steroids, waiting to take a look at your order and hold it, change it, reject it, slip it - all in the name of another company - NOT FXCM (this is really important to understand how this scam works). So, FXCM could state, that they were not trading against the customer. But they were sending their orders mostly to a firm that did trade against the orders, "Effex" - and this company was not only owned and controlled by FXCM, it was in their office, run by an ex-employee, on FXCM's computer network, using the same IT. To see a legal perspective of how FXCM's .. excuse me.. "Effex" dealing operations worked, take a look at this statement from the complaint:

http://www.zerohedge.com/news/2017-0...tly-banned-nfa

Largest Retail FX Broker FXCM Banned By CFTC, Fined $7 Million For Taking Positions Against Clients

http://www.zerohedge.com/news/2017-0...ions-against-c

While I can't comment on the CFTC complaint specifically due to the nature of our settlement with them, I will say FXCM stands by our No Dealing Desk (NDD) model. It's worth noting we would not have suffered more than $200 millon dollars in losses during the SNB flash crash of 2015 had we been taking the other side of client trades unlike so many of the DD firms in the industry.


Here's a recap of what happened on January 15, 2015:

The majority of retail forex traders were long EUR/CHF when the Swiss National Bank made their surprise announcement to abandon the 1.2000 exchange rate floor they had established for the pair. Had FXCM been on the other side of client trades, we would have made money when EUR/CHF dropped and retail traders took massive losses on their long positions.

The moved wiped out those clients' account equity as well as generated negative equity balances owed to FXCM of over $225 million. The caveat of our NDD model 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 using NDD forex execution did not cover their margin call with us we still had to cover the same margin call with our liquidity providers. As a result, FXCM ended with a regulatory capital shortfall. Accordingly, FXCM needed to get a loan to cover this balance, which we did. For anyone that still thinks FXCM is running an FX dealing desk on our NDD model, the SNB event demonstrated that is not the case.


How does our NDD model work?

FXCM uses 16 liquidity providers to create a best bid best offer price stream for clients. LPs selected to price retail clients are forced to adhere to an extremely high standard of execution beyond just price including consistently low rejection rates, low latency, minimum quote sizes and high fill ratios even during market events.


We discuss in our UK execution study the criteria we use to rank our liquidity providers which you can see listed in question 13 of the FAQ. FXCM's liquidity providers are ranked based on compliance to these standards which we identify as providing the best customer experience possible. Being a top ranked liquidity provider is important. Liquidity providers with the best pricing according to these rules may gain an advantage over other liquidity providers which could result in a large increase in orders captured. Poorly performing liquidity providers are ranked lower for order flow and ultimately could be removed from our platform until they return to compliance.

Also, the results of this study show FXCM UK retail client order prices to be better for FX than futures prices (74.97% of the time) and interbank prices(91.56% of the time).*

_________________________________

* The study does not in away way attempt to represent that FXCM maintains a particular capacity or performance level. The figures in this study are provided for information purposes only, and are not intended for trading purposes or advice. FXCM is not liable for any information errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. Past results are not indicative of future performance.

Material Assumptions
FXCM's Retail Clients are defined as individual, joint, and corporate accounts trading on our retail price stream.

The comparison to each of the Futures and Interbank data is made at the time that the FXCM client order is executed. Normal market slippage and slippage due to rejections by liquidity providers are already included by the time the FXCM client order is executed. However, there is an assumption that there is no slippage on the Futures or Interbank market data.

In order to maintain consistency, Futures Market data and Interbank data used the same acceptable ranges in market trades. The summary of findings is based on the assumption that the maximum acceptable difference between the FXCM price and the Interbank/Futures market price is 5 pips in either direction.

Fees that a participant would pay on the Futures or Interbank market, such as CME Exchange Fees, NFA Fees, FCM Fees, Clearing Fees, and other commissions, were excluded from the study. Similarly, FXCM Commissions are excluded from the study.

Here there is official document from the NFA
http://www.nfa.futures.org/basicnet/...px?seqnum=4405



It is pretty bad... Essentially they set up a fake company called "Effex", that was betting against the FXCM's clients. Then, the profits were sent back to FXCM via some rebates...

Pure evil :-D

any way to file class action lawsuit against fxcm? when i opened an account with them i told them expicitly that i want a NDD model. Now they have a firm that is trading against clients.

Don't bother asking Jason FXSCAM that question. He will just answer with some totally irrelevant information like their latest Q4 result or some bullshit about their "independent" liquidity providers. Actually 25% of their total liquidity was provided by themselves - by a computer program designed to trade against their customers. This program took a last look at orders before executing them to give an edge to FXSCAM. Thieves! Scammers!