LeapRate Exclusive… LeapRate has learned that ASIC licensed Australia-based Retail FX brokerage group USGFX has taken a major step toward Europe, setting up a UK subsidiary called Union Standard International Group Limited (we’ll call it USGFX UK).
The company had applied for and received an FCA license for USGFX UK, which became effective on November 5. The license is a 125K “matched principal only” license, meaning that USGFX can take and hold client funds in the UK but cannot act as a market maker. That probably isn’t going to be an issue though, as USGFX UK – like the UK subs of many foreign based Retail FX brokers do – will likely send all its trading traffic to be executed at its parent company abroad.
The company plans to soon launch service for both retail and institutional clients from the new company in the UK.
To head USGFX UK the company has hired compliance expert Simon Quirke, an experienced regulatory consultant coming from outside the Retail FX sector. Mr. Quirke also has trading experience at Credit Suisse and Lehman Brothers.
The USGFX move follows a number of other foreign brokers who have recently decided to set up shop in London with an FCA license, even though a pending Hard Brexit could mean that the license will be good for the UK only, come March 2019, and not good for the rest of Europe. Other recent FCA license recipients (and license upgrades) among foreign FX brokers include Capital.com, Direct Trading Technologies, Blackwell Global, ATFX, and FXTM. Some of those brokers have other licensed subsidiaries in EU countries.
Based in Sydney, Australia, USGFX is headed by Israeli-Australian CEO Shay Zakhaim. The company has a number of noted institutional clients, including the Australia arm of recently launched TradeFred, the retail FX arm of gaming giant Betfred. As was also exclusively reported at LeapRate, TradeFred went live in Australia late last year with website tradefred.com.au. The company’s Australian subsidiary BrightAU Capital Pty Ltd is acting as an introducing broker (or more formally, a Corporate Authorised Representative) of USGFX’s parent company Union Standard International Group Pty Ltd.
USGFX went through a strange episode in the summer of 2017, with its China office raided and employees held hostage for a week. The angry clients were demanding the return of about $2.6 million in losses they had reportedly incurred on Australia-to-U.S. dollar (AUDUSD) trades, blaming USGFX for their losses. The episode was eventually resolved.
LeapRate spoke with USGFX CEO Shay Zakhaim, who had the following to say:
Staying true to our mission of bringing our traders the most comprehensive and regulated Financial Services offering, including the most advanced trading platforms and clients support, we are delighted to receive our brand new FCA licence.
We strive to be a trusted trading partner to all of our clients globally, our focus is always on our clients and always will be.