Despite
volatility in financial markets, the summer period brought lower engagement
from individual investors in the US and a decrease in the value of their
deposits. According to the latest results, they have reached their lowest
levels in nearly half a year.
FX Deposits Shrink by $12
Million in a Month
According
to the latest data from the Commodity Futures Trading Commission (CFTC) for
July 2024, the total value of FX deposits in the US amounted to $545.5 million,
falling 2.2% from the $557.5 million reported in June. In nominal terms, this
translated to a decrease of $12 million and gave the worst result since
February 2024.
As seen in
the chart below, this also breaks the upward trend observed since the end of
last year, which had provided a rebound from medium-term lows.
The data
doesn’t align with separate FX volume data reported by Cboe. In the case of the
exchange , volumes grew to $1 trillion from the $950 billion reported in June.
Everyone Down Except
Interactive Brokers
The
declines were reflected in the results of individual firms, with the strongest
percentage drop seen in the case of Trading.com, amounting to 7.5%. However, it
should be noted that nominally it was also the most modest, translating to just
under $156 thousand.
The largest
nominal decline was recorded by OANDA, losing $8.5 million in FX deposits, or
4.6%. Compared to June, the value slipped to $184 million.
At the same
time, Gain Capital, which holds the largest market share, lost 0.8% to $206
million, increasing its lead over OANDA.
The only
broker that increased the value of FX deposits in July 2024 turned out to be
Interactive Brokers. In its case, they grew by 7.3% to almost $30 million, up
from $27.7 million reported a month earlier.
Regulatory Financial
Reporting for Forex Brokers in the US
CFTC plays
a vital role in monitoring the financial stability and transparency of US-based
Forex brokers. Retail Foreign Exchange Dealers (RFEDs) and Futures Commission
Merchants (FCMs) are required to submit comprehensive monthly financial
statements to the regulatory body.
These
reports must encompass key financial metrics, including:
- Financial
Indicators - Adjusted
net capital - Client
assets
Retail
forex obligations reflect the aggregate assets held on behalf of clients by
FCMs or RFEDs, taking into account any realized profits or losses. This mandate
applies to all 62 registered RFEDs and FCMs operating in the United States.
Notable entities such as Charles Schwab, Gain Capital, IG, Interactive Brokers,
OANDA, and Trading.com are among those required to comply. These firms must
make their financial commitments publicly available, fostering industry-wide
transparency.
Recent
trends indicate that FCMs are making significant investments in advanced
front-end technologies. This strategic initiative aims to boost operational
efficiency and enhance their competitive position in the ever-evolving
derivatives market.
Despite
volatility in financial markets, the summer period brought lower engagement
from individual investors in the US and a decrease in the value of their
deposits. According to the latest results, they have reached their lowest
levels in nearly half a year.
FX Deposits Shrink by $12
Million in a Month
According
to the latest data from the Commodity Futures Trading Commission (CFTC) for
July 2024, the total value of FX deposits in the US amounted to $545.5 million,
falling 2.2% from the $557.5 million reported in June. In nominal terms, this
translated to a decrease of $12 million and gave the worst result since
February 2024.
As seen in
the chart below, this also breaks the upward trend observed since the end of
last year, which had provided a rebound from medium-term lows.
The data
doesn’t align with separate FX volume data reported by Cboe. In the case of the
exchange , volumes grew to $1 trillion from the $950 billion reported in June.
Everyone Down Except
Interactive Brokers
The
declines were reflected in the results of individual firms, with the strongest
percentage drop seen in the case of Trading.com, amounting to 7.5%. However, it
should be noted that nominally it was also the most modest, translating to just
under $156 thousand.
The largest
nominal decline was recorded by OANDA, losing $8.5 million in FX deposits, or
4.6%. Compared to June, the value slipped to $184 million.
At the same
time, Gain Capital, which holds the largest market share, lost 0.8% to $206
million, increasing its lead over OANDA.
The only
broker that increased the value of FX deposits in July 2024 turned out to be
Interactive Brokers. In its case, they grew by 7.3% to almost $30 million, up
from $27.7 million reported a month earlier.
Regulatory Financial
Reporting for Forex Brokers in the US
CFTC plays
a vital role in monitoring the financial stability and transparency of US-based
Forex brokers. Retail Foreign Exchange Dealers (RFEDs) and Futures Commission
Merchants (FCMs) are required to submit comprehensive monthly financial
statements to the regulatory body.
These
reports must encompass key financial metrics, including:
- Financial
Indicators - Adjusted
net capital - Client
assets
Retail
forex obligations reflect the aggregate assets held on behalf of clients by
FCMs or RFEDs, taking into account any realized profits or losses. This mandate
applies to all 62 registered RFEDs and FCMs operating in the United States.
Notable entities such as Charles Schwab, Gain Capital, IG, Interactive Brokers,
OANDA, and Trading.com are among those required to comply. These firms must
make their financial commitments publicly available, fostering industry-wide
transparency.
Recent
trends indicate that FCMs are making significant investments in advanced
front-end technologies. This strategic initiative aims to boost operational
efficiency and enhance their competitive position in the ever-evolving
derivatives market.
This post is originally published on FINANCEMAGNATES.
