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Screenshot of a breaking news alert e-mail from Q2 2017
US-based clients issued with notice that open positions will be liquidated on April 16 at market rate, overseas business to continue and US futures client base to be transferred to Advantage Futures
US institutional FX broker and liquidity provider ILQ has announced that it is to cease its entire retail forex business in North America as of April 11 this year, and has issued a notice to its partners dated April 4 in order to explain that the firm will no longer accept orders which initiate new positions as of Friday, April 11 at 5.00pm EDT and will liquidate all open positions on Wednesday, April 16 at 3.00pm EDT.
ILQ issued this notice during the late afternoon on April 4, however during the earlier stages of that day, it had become apparent to one particular introducing broker who had a partnership agreement with ILQ that the company was planning its exit from the US market imminently.
Paul Towne, CEO of Massachusetts-based NFA-regulated introducing broker Back Bay Forex (BBFX) yesterday explained to LeapRate that “We are in the process of sending a pre-emptive letter to our clients, as we have very good reason to believe that ILQ is likely to withdraw from the US market within the next few days.”
Shortly after explaining this to LeapRate, BBFX issued a notice to its clients, detailing that “We have reason to believe that Institutional Liquidity (ILQ) may be acquired by another broker, or may leave the US Foreign Exchange market within the next few business days.”
The letter further explained that “In light of this news, we are taking proactive steps to ensure our clients have the best available trading options for their accounts with BBFX. Your business is very important to us and we would like to continue to provide you with a high level of service and the best broker solutions.”
BBFX’s communication to its clients concluded by reassuring all clients that their funds are totally safe, and will be returned to all clients, and that BBFX will endeavor to provide alternatives to its clients, which include US firms OANDA, CITI FX Pro, FXDD and FXCM.
Mr. Towne explained yesterday to LeapRate that “it is possible that ILQ may be purchased, although it is not easy to predetermine which company may be interested in such an acquisition. As I see it, if an acquisition is to take place, it could be GAIN Capital or FXCM that would be interested rather than any other firms.”
Just a matter of hours after BBFX had discussed this matter with LeapRate and issued the pre-emptive letter to its clients, ILQ confirmed that it is indeed ceasing its entire retail business as a retail foreign exchange dealer (RFED), with Advantage Futures set to inherit all existing ILQ futures accounts.
Making a corporate statement yesterday on the acquisition of ILQ’s futures client base, Joe Guinan, Chairman and Chief Executive Officer of Advantage Futures stated that “We are honored that ILQ selected Advantage to serve their clients and our 90 dedicated employees are eager for this opportunity,” stated Mr. Guinan
Despite its retraction from the US market, in congruence with Mr. Towne’s prediction, the firm will eschew the US and continue to focus on its existing overseas FX operations.
An email announcement sent to ILQ futures customers notified them of the transfer on April 1. The announcement noted that Advantage Futures will ensure a smooth transition with minimal interruption to customers’ trading.
ILQ Chief Executive Officer Jason Tanner publicly stated that “ILQ is excited to be partnering with Advantage Futures and its exceptional management team to continue to offer futures trading to our customers.”
“Although ILQ will no longer be offering on-exchange futures directly to our clients, we believe that Advantage will continue to provide the same great service and customer experience that our customers have grown to expect” concluded Mr. Tanner.
ILQ’s notification to its FX partners advises that clients should close outstanding positions and withdraw their funds prior to April 11, 2014.
Below is the entire notice which was issued yesterday by ILQ:
April 4, 2014
NOTICE OF LIQUIDATION OF OPEN FOREX POSITIONS ON
Dear Valued Customer:
Please take notice that Institutional Liquidity LLC (“ILQ”) is discontinuing its business as a retail forex exchange dealer (“RFED”). Therefore, ILQ is providing notice to you of the following:
- As of , ILQ will no longer accept orders which initiate new positions. You will be able to close open positions in your account until .
- On , ILQ will liquidate all open positions in your account at the prevailing market rate.
Any funds remaining in your account after the liquidation of open positions on will be returned to you. You should provide withdrawal instructions to ILQ on or before indicating the method with which you would like to receive the remaining funds in your account. No wire fees or transfer fees will apply to withdrawals requested or processed following the issuance of this notice.
If funds remain in your account after and ILQ has not received withdrawal instructions from you, ILQ will attempt to contact you via phone and/or Email to coordinate the final withdrawal of your funds.
To facilitate a timely and orderly liquidation of your positions and return of your funds, ILQ encourages you to close all positions and provide ILQ withdrawal instructions prior to .
Withdrawal requests can be provided to ILQ by logging into your portal and following the instructions under the “Banking” tab. You may also contact ILQ’s Client Support Team via Email ([email protected]) or phone (1-800-619-5007) to facilitate your withdrawal request.
We would like to thank you for being an ILQ customer. If you have any questions, comments, or requests about any of the information contained in this notice, please contact ILQ’s Director of Client Support, Chris Moon, via Email ([email protected]) or phone (616-691-5600).
Very truly yours,
Institutional Liquidity, LLC