FX week in review: Crypto CFD ban, ETX Capital sold
This week’s FX industry news as well as the discussion on our website was dominated by one main topic – the decision by UK financial regulator The FCA to part with its EU counterparts and ban outright all derivative instruments of digital assets – which basically means cryptocurrency CFDs.
The story was first reported at FNG, and we have a full review and analysis of what that means for the Retail FX and CFD sector in the UK and beyond.
There was certainly more to report this week as well – the closing of the sale of ETX Capital, more sports sponsorships / brand ambassadors for Forex brokers, record results from CMC Markets, and executive moves involving ADSS, Broadway Technology, Devexperts, and lots more.
Some of the top forex industry news items to appear on the pages of FNG this past week included:
FCA bans cryptocurrency CFDs for retail traders. Reported first at FNG… In one of the first major moves it has taken since basically breaking away from coordinating retail investor rules with European financial regulator ESMA as EU-UK license passporting is coming to an end, UK regulator the FCA announced today that it is banning the sale of derivatives that reference certain types of cryptoassets to retail consumers. The ban includes exchange traded notes (ETNs) and contracts for difference (CFDs) of cryptocurrencies. The ban will come into effect on 6 January 2021. The FCA’s announcement, which hit the wires just after 11am UK time Tuesday, led to a quick drop in share price at a number of publicly traded Retail FX brokers including Plus500, IG Group and CMC Markets.
XTB.com adds soccer icon José Mourinho as Brand Ambassador. Poland based Retail FX and CFDs brokerage house X Trade Brokers Dom Maklerski SA – operator of the XTB.com and X Open Hub brands – has leaped into the world of forex sports sponsorships, signing legendary Portuguese soccer coach José Mourinho as a brand ambassador for XTB.com. José Mourinho is currently the manager of English Premier League club Tottenham Hotspur. He is widely regarded as one of the greatest managers of all time in European football, having led four teams in four different countries to their respective league championships, in addition to winning UEFA Champions League titles with his native FC Porto and with Manchester United.
Exclusive: Hantec Markets signs Don Jazzy as Africa Brand Ambassador. FNG Exclusive… Much of our recent coverage of Retail Forex brokers signing sponsorship or brand ambassador deals has been around sports, and specifically European soccer. Which makes sense – teams and players in the EPL and Serie A and La Liga et al are well followed not just at home but around the world. The key demographic of those who follow sports match well with that of online trading – namely male, and young to middle age. However there are indeed many other geographies and demographics out there, and we are also beginning to see an increase in more local and region specific deals. And here is one such new agreement.
Guru Capital completes acquisition of ETX Capital. Rolle, Switzerland based fintech investment fund Guru Capital has announced the closing of its acquisition of London based ETX Capital from UK private equity firm JRJ Group. The Guru-ETX deal was first announced in early June. The parties did not disclose the price paid for ETX. ETX did £32.2 million (USD $40 million) in Revenue in 2018 with profit coming in at £1.9 million, both figures fairly flat as compared to the previous year. The company has yet to report 2019 results. ETX Capital, operated by FCA regulated Monecor (London) Limited, is a leading Retail FX and CFD broker. And, as was exclusively reported by FNG last month, has also branched out into capital raising and investment banking services for mid and small cap companies.
CMC Markets registers steep increase in CFD trading revenues in H1 2021. UK online broker CMC Markets Plc (LON:CMCX) has earlier today provided a trading update for the six months to end-September 2020 (H1 2021), with the solid results leading to increased full year guidance. The broker continued to build on the momentum gained in 2020, resulting in a strong trading performance across all areas of the business. This was supported by an ongoing focus on retaining and acquiring high value clients and diversification through its institutional B2B and stock broking business. In addition to that, the period has been marked by elevated volatility resulting from the COVID-19 pandemic increasing client trading activity. This led to CFD net trading revenue of approximately £200 million, sharply up from the level of £85 million registered in H1 2020.
FX industry executive moves reported this week at FNG include:
❑ Exclusive: Broadway’s Head of Sales Evelina Rosenstein joins Capitolis.
❑ Exclusive: DMALINK hires ADSS exec Michael Idzkowski as Sales Director (EMEA).
❑ Devexperts adds MetaQuotes, oneZero vet Denis Kozlov as VP Bus Dev.
❑ Broadridge appoints Vijay Mayadas as President of Capital Markets.
❑ Marex Spectron appoints Phillip Price as Head of Ferrous Metals Trading.
❑ Cobalt adds Barclays exec Duncan Lord to head post trade operations.