Forex traders in the United States are about to be given a fourth option when it comes to choosing a broker for their forex deals. XM.com parent company, Trading Point Group, has finally applied for a retail forex license with the National Futures Association – a self-regulatory organization for derivatives industry participants in the United States of America.
More players move into the US
This news follows on from another player entering the forex arena in the United States. February of this year saw IG Group finally launch its much-vaunted offering to clients in the United States of America, as soon as they had received their license to operate as a retail foreign exchange broker in the jurisdiction.
The decision by Trading Point does not come as a surprise to many in the industry since the market in the United States has become much more attractive to retail brokerages. This is particularly due to a massive tightening of regulations in other jurisdictions where these large fintech companies had originally opened up shop. The parent company of XM.com leveraged all their vast experience in the area of retail foreign exchange brokering and determined that there is quite a gap in the market in the United States.
Dodd-Frank Bill exodus opened opportunities
The exodus of retail brokerages following the enactment of the Dodd-Frank Bill in 2010 was a turbulent time in the industry. Only three retail brokerages would be left once the bill was introduced. These were the IG Group, Forex.com, and OANDA. However, with costs and regulations increasing the world over, the market in the United States is once again becoming much better for these companies.
The CEO of Trading Point Group CMO, Chris A. Zacharia, says that the management of the company is firm in its belief that there are more opportunities available in the United States. He particularly stresses that there are far too few operators in the market and the time is ripe for new entrants to challenge the bigger, more established brands.
He also went on to say that the company was not looking at some “static assessment of the market” in which they will be featuring their second brand (trading.com), and they do not look exclusively decide what share of the market is satisfactory. Instead, the company is specifically looking at the situation in a more dynamic manner than they have done before. This allows them to view the overall development of the market and the evolution happening within it. They are also paying particular attention to the role that the company can play in enabling the market to grow – and to thrive off the work they put in while there are still relatively few market participants.
Singapore and Cyprus were popular jurisdictions for retail brokerages, but with new regulations in Singapore due to their stature as a center of cryptocurrency and Cyrpus’ problems with capital restrictions, the market has changed. The European Union has also normalized a lot of regulations and has forced errant countries such as Estonia, Malta, and others to tighten up their own regulations.