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Retail Forex giant FXCM Inc (NYSE:FXCM) has encountered some problems in France, which boasts having one of the strictest Forex regulators – the AMF.
According to a L’AGEFI report, the Forex firm is facing hefty financial sanctions in France for not checking the regulatory status of its partners in the country.
The report says that FXCM risks a fine of EUR 1 million ($1.14m) – this is the amount proposed last Friday.
The fine is related to checks that the AMF conducted at FXCM’s French partners back in 2013. The checks found that three of the partners lacked the necessary authorization to offer portfolio management services to third parties.
A total of 113 customers have been affected by the activities of FXCM’s partners in question. The regulator seems to be concerned by the size of losses that these traders have incurred – the total is EUR 2 million. For every 4 euros earned, 100 were lost, with the average loss per customer being EUR 18,000.
L’AGEFI quotes FXCM representatives, who note that FXCM is regulated in France and that the losses the 113 traders incurred are in line with the usual for this market. In addition, FXCM’s representatives explained that the broker has ceased its relations with the problematic partners and that it has strengthened its monitoring and compliance mechanisms.