Since the onset of new rulings for retail FX firms which included the necessity of lodging large capital sums with The National Futures Association (NFA) recently, the appeal of operating as a retail firm in the United States has reduced exponentially, with more companies canceling their NFA membership than new applicants heading toward the US market.
As the NFA has been tightening its rules, the retail FX sector in the US has been getting thinner, with brokers leaving the country for jurisdictions with less strict rules and capital requirements. For this reason, moves by companies which involve actually approaching the NFA strike attention, withLivevol Securities, the trading subsidiary of software provider Livevol Inc, being an example of a firm which has been courting the regulator since the spring of this year.
On October 23, 2014, Livevol Securities managed to obtain Introducing Broker status, at the same time securing NFA membership. LeapRate reported previously that Livevol Securities applied to become an an introducing broker in April this year, while the application for NFA membership was filed in July this year. The regulatory approval marks an important step in the development of the business, which started operating in May 2011. It presently offers its proprietary technology in the form of the Livevol X platform, to traders with large portfolios.
The steps taken by Livevol resemble those made by trading platform provider NinjaTrader, which acquired Mirus Futures in the summer. Mirus Futures obtained introducing broker status on October 20, 2014, just a couple of days before Livevol saw the latest regulatory nods. For the time being, both Mirus and Livevol do not have the status of forex dealer members, being satisfied with IB registrations. The latter means lower capital requirements – $45,000, rather than the $20 million demanded from FDMs. It is, of course, interesting to see whether these companies will demonstrate further ambitions in this respect.
An example of an ambitious company in terms of US retail FX is Phillip Capital, a subsidiary of the Singaporean securities group with the same name. In June this year, the company became an approved forex firm and FDM in the United States. Earlier this month it became a broker dealer registered by notice and now the stage is set for the launch of Phillip Capital’s retail FX business in the US.