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US Retail FX Client Assets Continue Declining Despite Record Volumes

U.S. retail FX client assets fell, despite record-breaking global FX trading volumes in September. The industry is also getting more concentrated.

Following a surprise increase of 7 percent ($41 million) in July, client assets supervised by registered U.S. retail FX brokers declined 2 percent (or $12.6 million) in September. This was the second straight month that the figure dropped 2 percent.

The total client assets now total $607 million as of Sept., 30, 2014, according to the CFTC report. The big three team of OANDA, GAIN Capital Forex.com and FXCM also consolidated their stranglehold of the U.S. retail FX market. The three have a combined market share of at least 75 percent of all the customers, compared with 73 percent in August. Part of this reason could be due to FXCM’s buyout of the U.S. properties of IBFX, which saw FXCM absorb client assets worth $16 million from IBFX.

The paradox is that the decline in client assets happened at a month when global forex trading volumes rose to new records. Some U.S. –based firms such as GAIN Capital and FXCM announced record retail trading metrics.

Meanwhile, RBC Investor & Treasury Services, which is wholly owned by the Royal Bank of Canada, has appointed Andy Allen as the new MD based in Singapore. In his new role, Allen will oversee RBC’s Investor & Treasury Services.

Allen, who has at least 25 years experience in international banking, previously worked with JP Morgan Investor Services.

Commenting on his appointment, RBC said: “Andy brings comprehensive knowledge of the securities industry, risk management, the local operating and regulatory environment and relationship management of clients, both domiciled in Singapore and those looking for offshore solutions.”

 His immediate boss is Andrew Gordon, the Managing Director (Asia) at RBC Investor & Treasury Services.

 

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