Thanks to considerable regulatory efforts making it extremely difficult for forex brokers to operate in the US the number of forex brokers keeps going down. Forex Club today announced to its employees that it is going to downgrade its license to FCM, basically meaning it will no longer be an RFED and will not be accepting retail forex traders directly. Forex Club will focus on institutional business and will probably partner as an IB with another RFED on retail business. As part of this focus change Michael Klena, formerly E*Trade, was appointed as US CEO. This is similar to the action taken by Easy Forex last year.
Forex Club, if we analyze it correctly, is going to put the regulatory capital to work in some other jurisdiction where it is going to concentrate most of its retail focus. With the NFA registration gone FC will probably get regulated in another reputable jurisdiction such as the UK or Australia. FC may acquire a well positioned firm or make a huge marketing push to establish itself in the new market.
It’s sad to see one more retail broker depart the business however at least Forex Club will remain in the US through retail IB partnership and with major focus on institutional market.
FC however is not going to be the last one in withdrawing as a retail forex broker from the US market. We are aware of another broker that is itching closer to the same decision and this should be announced within the next six months.