Advanced Markets exits US retail market

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Advanced Markets has become the latest retail forex broker to exit the US market to focus on its wholesale white-labelling business, signalling continued consolidation of the US market amid tighter regulatory oversight.

In a statement issued on October 24, Advanced Markets said the move would enable it to focus on its primary business of providing wholesale liquidity, credit and technology direct market access (DMA) services. It reflects the ongoing outflow of retail forex brokers since the industry regulator, National Futures Association, introduced strict capital requirements for those pitching margin forex to retail clients in 2010.

Advanced Markets said a significant portion of the firm's retail accounts were managed accounts in which trading was managed by third-party professional fund managers. It said it will continue to offer DMA trading and credit solutions and services to hedge fund managers, institutional asset managers, commodity trading advisers and commodity pool operators, as well as its 150–200 eligible contract participants and their non-US equivalents.

The move also follows the May launch of Ultimt, a liquidity, credit and technology system for MetaTrader brokers developed in conjunction with technology vendor Fortex, in Redwood, California. The system is expected to increase monthly trading volumes by $50 billion, although no comparative figure was provided.

Advanced Markets is privately held, with outside investors including Macquarie Americas Corp, a wholly owned subsidiary of Macquarie Bank and GFI Group.

Other companies that have exited the US retail forex market in recent months include Forex Club, which similarly announced a re-focus onto institutional business. As part of the initiative, it hired Michael Klena, formerly at E*Trade, as its US chief executive in August.

The company and its former chief executive Peter Tatarnikov, had been fined $300,000, as a result of an NFA complaint filed October 25 and a settlement offer submitted by FX Club and Tatarnikov.

The complaint, issued by the NFA, alleged that Forex Club violated several NFA requirements, including failing to maintain adequate books and records and failing to maintain an adequate AML program.

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