MB Trading just announced to its traders with accounts in the UK subsidiary that it’ll be moving them to the US subsidiary – the reason is that the UK office is simply isn’t worth maintaining. MB opened the UK office as the wave of US brokers opening offices in additional countries was at its peak – the idea was to move all non US clients to foreign subsidiaries where higher leverage and more flexible conditions could be offered. Non surprisingly though MB’s UK office wasn’t making much money – possibly because it didn’t have much marketing budget and presence or because it wasn’t given enough time, on the other hand the costs kept creeping up. With stagnation in forex volumes and reduced profitability it is now time for many brokers to make hard decisions – some lay off employees while others shut down not profitable offices.
When contacted by Forex Magnates MB Trading CEO Ross Ditlove had this to say: “Our UK operations were designed to offer global customers certain features that we could not offer in the US due to regulatory changes, such as 100:1 leverage. As global Forex volumes have dropped, we have discovered that the demand for those features is not as great as we had anticipated. Our US-based operations are outpacing our UK operations by a significant amount in terms of accounts and trading, and our analysis indicates that it is not necessary or prudent to maintain the operation in the UK from a cost/benefit perspective. The main feature that our customers care about is our true ECN environment, not higher leverage. Our US operations are part of a broader company that offers stocks, futures, options, and Forex trading and has been operating for more than a decade while meeting the tough requirements of the SEC, FINRA, and the NFA.”
. While I do respect MB as a brokerage, them folding their UK operation is clearly suggesting that forex client funds are safer in the USA. Are they?
Did he really just say “ECN” ? NFA told them that they need to stop using this term, and they called it “EXN” ever since. There might just be another 100K or so in that presser for the american regulator.