Very little money changed hands, for FXCM to acquire Alpari US’s $10 million in client assets.
As we predicted would happen, all but the largest US retail forex brokers are one by one deciding to exit the US market, and focus their efforts elsewhere. The problem has nothing to do with the true dynamics of the US market, which remain strong. The problem is the (over-)regulation of the US retail forex market, and the enormous regulatory costs involved in operating in the US.
The latest firm to leave is Alpari. Alpari is setting volume records elsewhere but has not been doing much in the US lately. Former Alpari US chief Daniel Skowronski was recently moved to London to run Alpari’s global operations (i.e. everything outside Russia). And according to the latest CFTC reports (as of July 2013), Alpari US had just $10 million of client deposits, making it the second smallest US retail forex broker by that measure.
While deals of these type are typically done for little or even no cash payment upfront, and usually for not much more on the back end, leaving the US market does free up more than $23 million of capital which Alpari had to leave tied up in the US, to comply with US regulations.
US retail forex traders are now left with a lot less choice than their international counterparts, with just ten remaining firms licensed to take US retail forex clients. Ans they can thank their own regulators for that.
For the complete FXCM press release click here.