Trading Point Group’s Trading.com Markets Inc has managed to secure the appropriate permissions from the National Futures Association. With this, the company has been registered as a retail foreign exchange (forex) dealer. Trading.com had applied for the license over a year ago.
Achieving FX Registration After A Year
Trading.com Markets Inc is now officially approved as a member of NFA and as a forex firm in general, according to the NFA’s BASIC system. Furthermore, the company has been formally registered as a retail FX dealer, having been registered on the 20th of April, 2020
Trading.com Markets Inc stands as one of the Trading Point Group brands, who also runs the XM retail broker. The Group had initially applied for the licensing rights all the way back on the 1st of March, 2019. Only now, after over a year, have they managed to get it.
US Becoming More Attractive For FX
The approval for Trading.com to serve as an FX broker comes at a time where there’s an overall resurgence in forex brokers across the US. Back in 2006, forty retail brokers were operating across the US. However, due to the Dodd-Frank Act implemented back in 2010, that number had collapsed to just five. These FX brokers, excluding Trading.com, are IG US, Gain Capital (Forex.com), OANDA, Interactive Brokers, and TD Ameritrade.
The steep drop in retail brokers was due to the Act itself, alongside an array of other regulations. While these regulations focused on retail customers’ protection within the financial services industry, it severely upped the capital requirements of brokers across the nation.
Worse Prospects Elsewhere
To put it in perspective, any retail forex broker that wishes to operate within the US, must have a minimum amount of $20 million on its balance sheet at any given point in time. Furthermore, these firms must maintain a further 5% of customer liabilities that exceed the $10 million mark.
As one would imagine, this stood as a significant turn off for most FX brokers, as jurisdictions in other regions, such as Europe, have far laxer regulations. However, the US has started to become an attractive spot for retail forex. In an amusing twist, this wasn’t due to the US easing its regulations, but keeping it the same while the rest of the world increased theirs. It’s strange how some things can turn out.
Now, all the US needs to do, is ensure that it doesn’t tighten its regulations even more. As long as the US seems desirable, it will get business and money flowing through its industries.