FX week in review: ASIC limits CFD leverage, M4Markets hires

Gerald Segal 0 Comments October 24, 2020

For the second time in three weeks the big FX industry news story dominating the headlines was regulator action. This time, it was ASIC’s plan to further regulate the FX and CFD industry, on the heels of a massive $75 million court action against now-defunct broker AlphaBinary. And it was all reported first at FNG.

Which startup FX broker in Cyprus has been aggressively hiring from Tickmill (including their CMO), HotForex, and IronFX?

What board changes are afoot at recently acquired ETX Capital?

Why did cTrader shut its cMirror copy trading module?

Where did USGFX get a new license?

Which long-term IG Group shareholder sold a more than $180 million stake in the company?

Answers to these questions and a whole lot more appeared on the pages on FNG this past week. Some of the top forex industry news items to appear on FNG this week included:

ASIC matches EU regulators with 30x CFD leverage cap. Well that didn’t take long. On the heels of a massive $75 million court order against now-defunct binary options and CFD broker AlphaBinary made just a week ago, Australia’s financial regulator ASIC issued what it calls “a product intervention order” imposing conditions on the issue and distribution of contracts for difference (CFDs) to retail clients. The new rules will come into effect as of the end of March 2021. We’d also note they are not permanent – ASIC will try them out for 18 months before making a decision as to whether or not to fully adopt the new rules. ASIC’s actions come close to what the FCA in the UK and ESMA throughout the EU imposed on their FX and CFD brokers in August 2018.

Exclusive: M4Markets hires Tickmill’s Marilena Iakovou as CMO. FNG Exclusive… FNG has learned that startup Retail FX and CFD brokerage M4Markets (m4markets.com) has made a number of strategic hires, as the company plans a full launch and additional regulatory licenses. We have learned that M4Markets has hired the two most senior marketing executives from Tickmill, Themis Christou and Marilena Iakovou. Ms. Iakovou was Tickmill’s CMO, and will assume that same role at M4Markets. Marilena Iakovou had been with Tickmill since 2016, joining from Orbex. She had also worked previously in marketing at IronFX. M4Markets has actually quietly hired a number of other IronFX alumni.

Exclusive: Venture capitalist Saurabh Sharma joins ETX Capital board. FNG Exclusive… FNG has learned that ETX Capital’s new owners Guru Capital SA have started to reshape the company’s executive suite, beginning with some wholesale changes on the board of directors. Stepping down from the board of Monecor (London) Limited, the company which operates ETX Capital, are Peter Sugarman and Roger Nagioff. No surprise there, as Mr. Sugarman is COO and a partner of JRJ Group, while Mr. Nagioff is the founding partner of JRJ – JRJ is the investment firm which ceded control to Guru Capital in the M&A deal. Joining the Monecor/ETX board are Guru Capital partners Ryan Nettles and Luca Merolla. And the other additions to the board are fairly interesting.

Spotware to permanently shut down cMirror. Fintech company Spotware Systems today announces that its cMirror service will cease operations. Spotware explains that, given the popularity of its copy trading service cTrader Copy, it has decided to permanently shut down cMirror. As we reported in August, cTrader Copy is a copy trading service, which includes risk management tools and detailed strategy profiles, which providers can use to showcase their products. It was introduced by Spotware in 2018 as an overhaul of its original mirror trading platform cMirror, and functions as a flexible investment platform and a fully-integrated feature of cTrader. The process will include two stages.

Exclusive: USGFX gets South Africa FSCA license. FNG Exclusive… FNG has learned that Retail FX and CFD brokerage group USGFX has set up a new subsidiary in South Africa called Union Standard International Group (Pty) Ltd. The new company has applied for and been granted an FSP (Financial Service Provider) license by South African financial regulator FSCA. The license is a “Category 1” license, enabling USGFX-South Africa to engage in transactions in derivative instruments as an intermediary. The license was formally granted on October 6. We have also learned that USGFX has hired Elisha Lurie to head its new South Africa operation.

Exclusive: BlackRock cuts position in IG Group from 9.8% to 5.1%. FNG Exclusive… It looks like BlackRock is calling a top in the market for CFD brokers. After we exclusively reported last month that BlackRock had sold down its long-held position in shares of Plus500, FNG has learned via regulatory filings that the American investment giant has now also sold out of nearly half of its holdings in Plus500 rival IG Group. BlackRock – the world’s largest asset manager with more than $6.8 trillion under management – has long been one of IG Group’s largest shareholders, keeping its holdings in IG at or around the 10% mark for the past three years. Regulatory filings made in the UK now indicate that last week BlackRock sold down its position from 9.84% to 5.05%.