FXCM’s New Margin Requirements
To be fair higher margin requirements isn’t solely on FXCM as it is something that the NFA has mandated be implemented by Nov. 30, 2009. What is interesting is how FXCM has decided to approach this.
There are two different announcements it sent out to its US (or FXCM LLC) customers and its FXCM UK customers. Both requirements will be raised, but what the FXCM UK requirements are being raised to FXCM LLC is DOUBLING that. If FXCM truly believed with the extent of the NFA’s regulations, don’t you think that the changes made would be the same no matter what the jurisdiction? Interesting to me, anyway.
The raising of margin isn’t a popular move amongst those who enjoy the high leverage and high risk/reward of Forex trading, but is something that other firms such as MFGlobal Canada has had in place for quite sometime.
In the words of FXCM …
… FXCM’s experience in Hong Kong, where significantly lower leverage levels (higher margins) are mandated by law, suggests that trading with lower leverage may assist clients in trading more successfully over an extended time period. The new margin requirements are intended to reduce risk by restricting traders from using excessive leverage.
Take a look below at the comparison shots …
FXCM LLC
FXCM UK
