Monday, May 13, 2013
Stocks and bonds under Fed pressure
The Federal Reserve and its bond buying program were a hot topic Monday, following aWall Street Journal report over the weekend that said central bank officials were considering an exit strategy for the massive stimulus measures that have been fueling the economy since late 2008. Stocks and bonds under Fed pressure - May. 13, 2013
Friday, May 10, 2013
Bloomberg snoops on users
Irked Goldman Sachs brass recently confronted Bloomberg LP over concerns reporters at the business news service have been using the company’s ubiquitous terminals to keep tabs on some employees of the Wall Street bank, The Post has learned.
The ability to spy on Bloomberg terminal users came to light recently when Goldman officials learned that at least one reporter at the news service had access to a wide array of information about customer usage, sources said.
In one instance, a Bloomberg reporter asked a Goldman executive if a partner at the bank had recently left the firm — noting casually that he hadn’t logged into his Bloomberg terminal in some time, sources added.
Goldman later learned that Bloomberg staffers could determine not only which of its employees had logged into Bloomberg’s proprietary terminals but also how many times they had used particular functions, insiders said.
The matter raised serious concerns for the firm about how secure information exchanged through the terminals within the firm actually was — and if the privacy of their business strategy had been compromised.
“You can basically see how many times someone has looked up news stories or if they used their messaging functions,” said one Goldman insider.
“It made us think, ‘Well, what else does [Bloomberg] have access to?’ ”
Thursday, May 9, 2013
Hungary will not use reserves to root out forex loans
May 9 (Reuters) - Hungary's central bank won't use its reserves to help households who owe trillions of forints worth in foreign currency loans, Governor Gyorgy Matolcsy told the weekly Heti Valasz.
Even after earlier relief programmes, hundreds of thousands of families remain exposed to swings in the forint's value after taking on euro and Swiss franc debt in a real estate boom.
Under Matolcsy, a former economy minister who took over from the hawkish Andras Simor in March, the bank has offered 250 billion forint ($1.1 billion) to help small firms with foreign currency loans.
But in the interview published on Thursday, Matolcsy gave a blunt "no" when asked if he could envisage using some of the bank's foreign currency reserves, worth 35.9 billion euros ($47.3 billion) at the end of April, to resolve the loans problem completely.
There were similar messages on Wednesday from Economy Ministry state secretary Zoltan Csefalvay, who said the government could do no more to help mortgage holders, and the central bank's managing director Marton Nagy, who said Hungary should bring in personal insolvency laws to help to deal with bad debts.
Hungary's large stock of foreign currency loans poses a major risk for central Europe's most indebted nation. It also limits the effectiveness of monetary policy because most household debt is denominated in Swiss francs or euros.
The bank has lowered interest rates in cautious quarter-point steps by a combined 225 basis points to a record low of 4.75 percent over the past nine months as inflation plunged to a 38-year low due to energy price cuts and weak demand.
Matolcsy affirmed his cautious policy stance in the interview, but added that he had discussed with bankers the idea of reducing interest rates "near consensus levels" in two or three bigger steps - an idea eventually abandoned.
"The overwhelming majority of leading bankers and strategic advisors recommended this approach (to avoid bigger cuts), and this is also closest to the conservative and responsible monetary policy that I advocate," Matolcsy was quoted as saying.
http://www.reuters.com/article/2013/05/09/hungary-centralbank-idUSL6N0DP2GT20130509?feedType=RSS&feedName=financialsSector
Wednesday, May 8, 2013
Euro fears grow as New Zealand and Sweden enter currency wars
http://www.reuters.com/article/2013/05/08/ecb-asmussen-idUSF9N0C301N20130508?feedType=RSS&feedName=financialsSector May 8 (Reuters) - The bailout of Cyprus shows how urgently the euro zone needs to establish a banking union to break the negative feedback loop between weak banks and governments, European Central Bank Executive Board member Joerg Asmussen said on Wednesday.
Cyprus this year became the fourth euro zone country that needed to be bailed out by international lenders, and unlike any other aid deal it controversially forced depositors to foot the cost of recapitalising banks exposed to debt-crippled Greece.
http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/opening_comment/2013/05/08/Euro_Rises_as_Sweden_Threatens_to_Join_Currency_Wars.html The so-called currency wars progressed further in today’s session, as two new countries jumped on the bandwagon of selling or threatening to sell its own currency to unwind recent strength.
Overnight, RBNZ Governor Wheeler announced that the central bank had already once intervened in Forex markets to bring down the price of the New Zealand Dollar. During European trading hours, Swedish Finance Minister Borg said the Krona’s strength may become an issue for the country’s central bank.
http://www.marketwatch.com/story/radical-fixes-needed-to-make-the-euro-work-2013-05-08 WASHINGTON (MarketWatch) — If you’re ever tempted to think the euro zone has turned the corner and is on the right track, go have a chat with Warren Mosler and he’ll set you straight.
The former hedge-fund manager and an original proponent of what has come to be known as modern monetary theory gave a talk recently at a wealth management conference in Zurich that took a pessimistic view of the euro /quotes/zigman/4867933/sampled EURUSD +0.81% righting itself on its current path.
“The European slow-motion train wreck will continue until there’s recognition that deficits need to be larger,” Mosler said at the conclusion of his analysis. “The continuing efforts at deficit reduction will continue to make things worse.”
Sunday, May 5, 2013
Lenders May Create Bitcoin Rivals, Says New Zealand Bank Group
Commercial banks may create digital currencies to rival Bitcoin, the virtual money whose U.S. dollar value collapsed by 46 percent in 24 hours last month, the head of New Zealand’s banking lobby said today.
Banks noticed the low cost of international Bitcoin transfers, and some may look to introduce competitors as a cap on issuance constrains the digital currency’s supply, Kirk Hope, chief executive officer of the New Zealand Bankers’ Association, said according to the e-mailed transcript of an interview with TVNZ television.
“If it’s not Bitcoin it might be some other type of digital currency that could come into play,” Hope said. The cap on Bitcoin issuance, which limits supply to about 21 million units, “doesn’t mean that some other player couldn’t come into the market, and, you know, that might be a bank.”
Thursday, May 2, 2013
Year of the yuan: China's explosive currency goes global
The ‘people’s currency’ of China is redefining the global economic monetary system. The closed-capital pariah is blossoming into a reserve standard and is hedging appeal against the indebted dollar and the untested euro, piquing foreign interest.
Degenerating credit quality across the board has prompted asset managers to shy away from the dollar, euro, Japanese yen, British pound, and Swiss franc. And some are turning to the yuan, a currency that 10 years ago was completely off limits to foreign investors.
An HSBC forecast projected that by 2015, the yuan will become one of the three most used currencies in global trade, in league with the dollar and euro. The report, issued in April, also foresees a third of China’s cross-border transactions being carried out in yuan.
U.S. Stocks Rise as ECB Cuts Rate, Jobless Claims Fall
U.S. stocks rose, with the Standard & Poor’s 500 Index rebounding from the biggest drop in two weeks, as the European Central Bank cut its key interest rate and American jobless claims unexpectedly fell.
The S&P 500 advanced 0.2 percent to 1,586.32 at 9:32 a.m. in New York. The equity gauge lost 0.9 percent yesterday as U.S. payrolls and manufacturing grew less than forecast, trimming this year’s rally to 11 percent.
Wednesday, May 1, 2013
Obama has a sweet retirement package. Will you?
FORTUNE -- President Obama's proposal to limit the value of 401(k)s, pensions, and other tax-favored retirement accounts to about $3.4 million certainly sounds reasonable. After all, at a time of big budget deficits, we shouldn't subsidize "the rich" with tax breaks, should we?
But when you look a little closer -- especially when you look at the value of President Obama's taxpayer-funded retirement benefits -- you might think a little differently about what "rich" means. For starters, the point at which Obama wants to eliminate your ability to deduct retirement account contributions isn't actually the $3.4 million in his budget proposal -- that's just an estimate. The real number is how much a couple age 62 would have to pay for an annuity that yields $205,000 a year. That $3.4 million -- which applies to the combined values of your pension and retirement accounts -- is subject to a sharp downward change in the future because annuity issuers charge significantly less for an annuity when interest rates are higher than they do today, with rates at rock-bottom levels.
I'll grant you that $205,000 a year -- the current IRS maximum for what a pension fund can pay a recipient -- is serious money in many places. But it doesn't buy you a rich retirement lifestyle in, say, Manhattan, N.Y., where 205K is equivalent to only 88K in Manhattan, Kans. The Manhattan-Manhattan distinction, from Money's cost-of-living comparator, is an example of the difference between being rich statistically and being rich in reality.
Second, I can't get past Obama wanting to limit savers to only about half the value of what he stands to get from his post-presidential package. Based on numbers from Vanguard Annuity Access, I value his package at more than $6.6 million. (My calculations are at the bottom of this piece.)
That's right, $6.6 million. And that doesn't include the IRAs in which Obama has been socking away the $50,000-a-year maximum, or the $18,000 (plus cost of living) a year he will get at age 62 for his service in the Illinois senate, or any other benefits he or his wife may realize from past or future jobs.
Slovenia Cut to Junk
Slovenia’s credit rating was cut to junk by Moody’s Investors Service, which cited “turmoil” in the country’s banking industry and said the government would have to offer lenders more financial support.
The rating was lowered two levels to Ba1 from Baa2, on par with Turkey, Moody’s said today, assigning a negative outlook. Five members of the 17-nation euro area are now rated junk by Moody’s. Standard & Poor’s and Fitch Ratings both rate Slovenia at A-, the fourth-lowest investment grade.
“The first key factor underpinning today’s rating action is the ongoing turmoil in the country’s banking system and the high likelihood that the sovereign will be required to provide further assistance and capital injections,” Moody’s said in an e-mailed statement from New York. “Asset quality at the banks deteriorated considerably in 2012 and has continued to deteriorate since.”
Slovenia, which before the rating action was on course to sell dollar-denominated benchmark bonds, is struggling with its second recession since 2009. The government is working to fix its ailing banking industry with a 900 million-euro ($1.2 billion) capital boost and the creation of a so-called bad bank to cleanse lenders’ balance sheets and aid economic recovery. A detailed overhaul plan is set to be presented to the European Commission in Brussels by May 9.
Friday, April 26, 2013
Forex Brokers Profitability Q1 2013
In Q4 2012, the retail forex trading industry hit a slump. A number of brokers exited the U.S. market as the NFA enforced stricter regulations. Those who were left standing also suffered client losses.
But don't worry just yet! Forex Magnates has released its quarterly data on broker profitability. By the looks of it, it seems like forex brokers had an amazing start to 2013!
Source: Forex Magnates
Here are some observations from the data collected:
On account growth:
Not only was Interactive Brokers the top broker in terms of most profitable client accounts, it also acquired a hefty number of new clients. Now with 19,666 accounts, up 17.68% Q4 2012, it's closing the gap on market leaders OANDA and FXCM.
Meanwhile, Gain Capital also saw double digit accounts growth, aided by its acquisition of FX Solutions. The company now has 12,384 accounts under its belt.
Of all the brokers listed above, only IBFX/TradeStation and MB trading posted slightly less accounts in Q1 2013 than in Q4 2012.
On client profitability:
Despite the increase in volatility (which is welcomed by most traders) during the quarter, we saw that almost all brokers reported a decline in the percentage of profitable accounts from Q4 2012. In fact, only three brokers, Alpari, ILQ, and FXDD reported higher numbers in client profitability from 2012.
Interestingly, ILQ, the broker with the second least number of accounts, posted an increase of 33.5% in the number of profitable accounts, after it came in dead last at 22.7% last Q4 2012
This isn't to say that if you use these specific brokers you have a higher chance of being profitable. You should still do your research and see which brokers provides the services that best fit your needs!
For the most part, I think we can see this report as a bright spot for the forex trading industry as it reverses a recent trend of declining figures that started Q1 2012. Could this be a start of an explosive boom for the forex industry? Right now, it's too early to tell, but early signs point to brokers starting 2013 off on the right foot.
For more interesting data points and insights on US forex broker profitability, check out the Forex Magnates article, "Q1 US Broker Profitability Report Showing Signs of Optimism" at forexmagnates.com!
Read more: http://www.babypips.com/blogs/espipionage/a-look-at-forex-brokers-profitability-in-q1-2013.html?utm_medium=email&utm_campaign=Daily+Newsletter+-+April+25+2013&utm_content=Daily+Newsletter+-+April+25+2013+CID_2f03974712f47cd885f1eb1529bead47&utm_source=Campaign%20Monitor&utm_term=most%20profitable%20forex%20broker%20in%20Q1%202013#ixzz2RaI0LH2d
Thursday, April 25, 2013
Wednesday, April 24, 2013
Physical Gold buying "Panic"
Following the entire "developing" world (where faith in paper money "backed" by $1 quadrillion in derivatives is at times questioned, and instead the people, for some inexplicable reason, fall back to hard currency equivalents) scrambling out to their local precious metal dealers to find "out of gold" signs virtually everywhere, yesterday it was the US Mint's turn to announce it had halted shipments of the popular one-tenth ounce gold American Eagle coin as it had run out, following a surge in demand (we expect this shortage will soon spread widely to traditional one-ounce denominations shortly).
Things in the US have gotten so bad, not only are most online dealers backlogged weeks and months in advance for most PMs (as the CEO of Texas Precious Metals explained in detail), but respected bullion vaults are also now on the verge of running out of inventory. As Reuters described, "Michael Kramer, president of Manfra, Tordella & Brookes (MTB), a major U.S. coin dealer in New York, has been inundated by orders from existing and new wholesale and retail customers. "It's panic. This is one of the busiest times in quite a while. People think gold's at the lows and they want to take advantage."
It was only a matter of time before the last bastion of paper money, London, also succumbed to the soaring demand for physical, and sure enough moments ago Bloomberg reported that the "Britain’s Royal Mint, established in the 13th century, sold more than three times more gold coins this month than a year earlier as prices declined."
Sales are more than 150 percent higher than last month, according to Shane Bissett, director of bullion and commemorative coin at the Royal Mint.
Sunday, April 21, 2013
Koo Says inflation in US based on liquidity 'should' have been 1600%
The existing (and ongoing) massive expansion of base money into the banking systems of the US, England, and Japan is without precedent. As Nomura's Richard Koo notes, at 16x statutory reserves,the liquidity 'should' have led to unprecedented inflation rates of 1,600% in the US, 970% in the UK, and 480% in Japan.
However, it has not, yet. In short, Koo continues, businesses and households in these economies have stopped borrowing money even though interest rates have fallen to zero. And with no one borrowing money and many actually paying down debt, the money multiplier has turned negative at the margin - because of the severe damage caused to balance sheets when the bubble collapse drove asset prices lower while leaving debts intact (so-called balance-sheet-recession).
This suggests that there is little physical or mechanical reason for the BOJ’s easing program to work. But the program could also have a psychological impact - and Japanese media is on an 'inflation' full-court press currently. The risk here is that not only borrowers but also lenders will start to believe the lies. No financial institutions anticipating inflation could ever lend money at current interest rates.No actual damage will be done as long as the easing program remains ineffective. But once it starts to affect psychology, the BOJ needs to quickly reverse the policy and bring the monetary base back to 'normal'. If the policy reversal is delayed, the Japanese economy (and inflation) could spiral out of control.
Via Richard Koo, Nomura,
The Money Multiplier... and inflation...
Before Mr. Kuroda was appointed BOJ governor, base money supplied by the Fed under quantitative easing amounted to 16.0x statutory reserves. The corresponding multiples for other central banks were 9.7x for the BOE, 4.8x for the BOJ, and 3.8x for the ECB. If the money multiplier were functioning properly, the money supply would therefore be 16 times larger than it currently is in the US, 9.7 times larger in the UK, 4.8 times larger in Japan, and 3.8 times larger in the eurozone.If such an expansion in money supply actually took place in a short time, it would normally entail a similar increase in prices, leading to unprecedented inflation rates of 1,600% in the US, 970% in the UK, and 480% in Japan. The reason why this has not happened will be discussed in detail below.In short, however, businesses and households in these economies have stopped borrowing money even though interest rates have fallen to zero. And with no one borrowing money and many actually paying down debt, the money multiplier has turned negative at the margin.
US and UK have 'not' been a success...
Central bank officials in the US and the UK claim quantitative easing has been a success because it prevented a Japan-like deflation. But, the rate of Japanese wage growth four to five years after the bubble collapsed was roughly equal to the levels now being observed in the US.
Because...
Common to all of these countries is the fact that businesses and households are saving in spite of zero interest rates. They are doing so because of the severe damage caused to balance sheets when the bubble collapse drove asset prices lower while leaving debts intact. Private savings are running at 8.8% of GDP in Japan, while the corresponding figures are 7.0% for the US, 3.3% for the UK, 8.1% for Spain, 8.6% for Ireland, 7.0% for Portugal, and 4.4% for Italy.The fact that businesses and households in these economies are responding to zero interest rates by saving money rather than borrowing and spending aggressively clearly suggests that lending - and hence the money supply - will not expand no matter how much base money the central bank supplies.Growth in private credit has been severely depressed. Even in the US, where conditions are said to be relatively healthy, private credit has yet to recover to pre-Lehman levels.Quantitative easing - whether in Japan, the US, or the UK - cannot directly stimulate the economy or raise the rate of inflation so long as businesses and households refuse to borrow money and spend it.
But still the central bankers try...
Mr. Kuroda and other reflationists would probably argue that the newly announced easing program differs fundamentally from the incremental approach taken thus far because it marks a “new dimension” in aggressiveness. This is correct in one respect and wrong in another. Although Mr. Kuroda argues that the announcement of the current program has had a much greater impact than past announcements, this hypothesis has already been tested overseas, and the medium and long-term results do not support his conclusion.
Ignoring the reality that...
Clearly, the issue is not how aggressively or quickly the central bank eases, but rather the extent of the damage to private sector balance sheets caused by the bubble collapse. These experiences also underline the fact that a great deal of time is needed for businesses and households to repair their balance sheets.
and the empirical proof that...
The limited impact of the bold monetary actions undertaken by the Fed and the BOE suggests we should not expect much from the BOJ’s plan in the medium term in spite of its aggressiveness.
Unintended consequences...
Perhaps more important was why Japan’s interest rates were so low.Essentially, the private sector had stopped borrowing money because of balance sheet problems, the subsequent debt trauma, and a shortage of domestic investment opportunities.With no private-sector borrowers, Japanese banks selling JGBs yielding 0.6% to the BOJ may find themselves forced to reinvest the proceeds in JGBs given the lack of alternatives.If the replacement bond is likely to yield only 0.4%, the correct option is to continue holding the bond yielding 0.6%.In that sense, quantitative easing in Japan has already reached its limits.
And QE may have run its course...
But the fact that businesses and households in both countries are now refusing to borrow in spite of zero interest rates suggests the impact of lower long-term rates may have spent itself
Because...
The underlying cause of a balance sheet recession is a decline in - and ultimate disappearance of - private demand for funds due to a critical shortage of borrowers.
Yet the quantitative easing policies adopted by central banks in the major economies are all designed to increase the number of lenders...
When the problem stems from the lack of willing borrowers, the central bank’s emergence as a new lender is hardly going to improve the situation.If anything, new lending by the central bank will further weaken private sector financial institutions already hurt by excessive competition.An objective analysis of the BOJ’s easing program in light of other countries’ experiences with quantitative easing suggests investors would be wise to rein in their expectations. There is no reason why the money multiplier should turn positive when private demand for funds is nonexistent despite zero interest rates.
The discussion above suggests that there is little physical or mechanical reason for the BOJ’s easing program to work. But the program could also have a psychological impact...
One notorious minister of propaganda is reported to have said that “people will believe a lie if it is repeated often enough.”In today’s Japan the media—and especially the omnipresent variety shows on TV—cannot stop talking about inflation. These commentators are completely unaware that the money multiplier in Japan is negative at the margin even though rates have fallen to zero. They are simply repeating the simplistic view that aggressive easing by the BOJ will eventually generate inflation.Hearing this from morning to night will cause some people to start worrying about inflation even though there is no way the BOJ’s policies can directly create inflation.If they start to anticipate higher prices and modify their behavior accordingly, inflation could become a reality.Moreover, the Japanese media has a tendency to move all at once and in the same direction, causing the lie to be repeated even more frequently. It would therefore not come as a surprise if many people changed their behavior in expectation of future inflation.
The problem is - what if the people start to believe...
The risk here is that not only borrowers but also lenders will start to believe the lies.No financial institutions anticipating inflation could ever lend money at current interest rates. A financial institution that suddenly saw inflation on the horizon could not continue holding 10-year government bonds that yield 0.6%. The resulting rush to sell could trigger a crash in the JGB market, inflicting heavy damage on domestic financial institutions.The question is how the Kuroda BOJ would respond to such a crash. If it began buying more JGBs, the monetary base would expand, stoking inflation concerns at a time when private demand for funds was already recovering and the money multiplier had turned positive at the margin.But if the BOJ sold its JGB holdings in an attempt to quell inflation concerns, bonds would drop further, blowing a large hole in the balance sheets of financial institutions and the government.By that time the monetary base could easily have grown to, say, 15 times statutory reserves. In that case the money supply would continue growing, causing inflation to spiral out of control, unless the central bank reduced the monetary base to about 1/15th of its current level.I suspect that the BOJ would employ all the tools at its disposal to achieve this, including a sizable increase in the statutory reserve ratio, but all of those measures would serve to push rates higher, resulting in large losses for the BOJ and other JGBs investors.
Which could rapidly lead to...
If the government bond market crashed, losses on the BOJ’s JGB portfolio would be subtracted from the money it transferred to the national treasury, adding to the fiscal deficit. And if the portfolio was large enough at the time of the crash, it could even raise doubts about the viability of the Bank’s balance sheet.The inflation fears and the talk of large losses at the central bank could then undermine confidence in the Japanese currency. Japan’s national debt now stands at 240% of GDP, domestic industry is being hollowed out, the population is aging and shrinking amid falling birthrates, and even the trade balance has fallen into deficit.The chief reason why people continue to use the yen in spite of these bleak fundamentals is that the BOJ has earned their trust with its anti-inflationary actions.If the BOJ recklessly stokes inflation, triggering a crash in the JGB market and heavy losses on the Bank’s bond portfolio, public confidence in both the currency and the central bank could evaporate overnight.
And don't rely on 80 year old 'proof' since it is different this time...
Mr. Kuroda’s methods have frequently been compared to those of the 1930s-era finance minister Korekiyo Takahashi, who championed a successful policy of BOJ underwriting of government debt issues. But Japanese people in those days could not move money freely overseas. The authorities today need to be especially careful inasmuch as almost anyone can move funds abroad with a telephone call or a few clicks on a computer screen.
Be careful what you wish for...
No actual damage will be done as long as the easing program remains ineffective.But once it starts to affect psychology, the BOJ needs to quickly reverse the policy and bring the monetary base back to a level more in line with the value of statutory reserves.If the policy reversal is delayed, the Japanese economy could spiral out of control at a time when base money equal to many times statutory reserves is sloshing around in the market.Moreover, the act of scaling back the monetary base must be carefully calibrated so as to minimize damage to the JGB market. The BOJ, Ministry of Finance, and Financial Services Agency should also have contingency plans in place in the event that easing triggers a crash in the yen or the bond market.
Full article below...
UK opposes financial transactions tax
The UK government has launched a legal challenge against plans for a European financial transactions tax (FTT).
The FTT, which aims to raise public funds and discourage speculative trading, will be adopted by 11 EU states - but not by the UK.
Ministers fear it could be imposed on UK firms trading with businesses based in one of those states.
Thursday, April 18, 2013
Swissquote Opens an Office in Malta
The Swiss forex broker and bankSwissquote has just released a report on its Q3 metrics. In line with the overall industry trend, revenues and profit rates are stagnant. Year –on-year, the company’s revenues decreased by 14.9% and net profit – by 30.5%. For 2012, Swissquote expects revenues of about CHF 112 million (appr. $118.5 million) across all its divisions (banking, forex, etc.).
Speaking of forex alone, Swissquotes forex eForex division has registered adecrease of 12.9% in trading results – from CHF 38.4 million to CHF 33.4 million. The eForex trading volumes have decreases by 16.5%, from CHF 313 billion to CHF 261.9 billion. The reason for this is mainly the low volatility of the foreign exchange market and naturally, Swissquote is not the only company affected: other major brokers like Forex.com have also reported decrease in retail trading volumes and revenue.
Swissquotes results - Q3 2012
Despite the results of the first three quarters of the year, and the continuing investor uncertainty, Swissquote is going on with its planned expansion. In October, the brokerset up a new office in Malta. This is Swissquote’s first European office outside its home base – Switzerland, and together with the company’s Dubai office helps the broker establish its positions on the European, Middle-Eastern and Asian markets.
The broker obtained a Category 3 license from the Maltese Financial Services Authority (MFSA). Explained in simple terms, this license allows Swissquote to render forex services to EU member states without any restrictions.
Up until now Malta was a favored spot for online gambling companies but apparently it is opening up to Forex as well. Another major broker operating out of the island is FXDD Europe.
Swiss DOTS To Open for New Clients and Issuers
Back in May, together with Goldman Sachs and UBS Swissquote launched the Swiss DOTS service (Swiss Derivatives OTC Trading System). The service appears to be gaining popularity and the DOTS trading volumes continues to increase. In October alone it registered 7,600 executed transactions. As the service is already proven to be successful, it will be opened to more clients and issuers and the DOTS offering will no longer be restricted to Swissquote customers only. This is good news for the industry, as DOTS offers a scope of 33,000 leveraged products (for comparison, the Scoach market place only offers 23,000).
Read Swissquote's full Q3 report here.
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