FXstreet.com (Barcelona) - The UK-based company City Index leading provider of retail derivative trading services including Contracts for Difference (also known as CFD's) and foreign exchange as absorbed FX Solutions, with this union City Index enhance their presence on the retail FX market, while FX solutions will broaden its product offering as well as is global reach.
This latest move is part of a process that began in September 2006 when City Index acquired IFX group a London-based company offering financial products, principally in the foreign exchange and global equity markets. Clive Cooke, CEO of City Index affirmed that the transaction will enhance and strengthen our current product offerings to our retail clients and institutional business partners and accelerate our expansion into new geographical markets.
Lars Christensen, CEO at Saxo Bank sees the move as a step of City Index to gain presence in the FX market: have had for some time that City Index is beginning to move into the big league of the handful of companies that have defined the retail FX industry until now. I believe it will lead to further expansion of the lower end of the retail FX space through even more clients being introduced to FX as an asset class, and as always, that can only be good for the industry.
Recent legal changes in the Forex Market, such as the requirement of banking licences in order to operate in the forex markets in Switzerland (expected in 2009), or the requirement of a $20 million minimal capital to act as a FDM, in the US (bill could be passed in 2008), seem to have started to instigate a wave of spur relocations and buyouts, which could advance the market consolidation, often forecasted but not yet seen.
Drew Niv, CEO at FXCM advances substantial changes in the Forex Market: The Law hikes minimum capital to $20M and that is just the minimum before open exposure and other capital haircuts effectively make it $40M for most firms.(Ã¢â‚¬Â¦) The fact that Private equity funds are now heavily invested in the industry will get the M&A machine rolling, and I expect many more deals over the next 18 months.
Tony Juste, FX Advisor at FXstreet.com shares the idea of the corporate moves as a consequence of the new regulations: As I see it, the inevitable happened. I've been in the FX business for 8 years now and I have to say that it looks like we'll have a clearly regulated environment in the end. This obviously has its consequences on the corporate side, but you know, I look at things from the trader point of view, and I only see advantages, because it will create a safer environment for traders, which will also be beneficial for the companies operating in the business. Therefore, it is my only wish from here that all these changes make the business more transparent, fair to traders than it has been in the past.