Traders should demand true transparency from their broker and IB
Traders are entitled to that information already. The fact that they were constantly mislead and lied to is yet another issue. "Damage control" will not change the that forex is hit hard and that a lot of people are going to "assure us" in the future that everything was taken care off just because the "business as usual" is suffering from severe income cuts from the brokers side.
They told that so many times that it becomes an issue for itself - why is there a need to repeatedly assure traders that they are not cheated? Somehow the answer seems to be obvious
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Following the shutdown of ILQ in the US, which mostly had IBs as clients, I had quick written interview with Vatsa Narasimha, Executive Vice President and Chief Strategy Officer at OANDA Corporation.
Narasimha notes that there are more stringent demands on players in the industry and that we can expect more consolidation. Traders should ask tough questions and demand true transparency from everybody.
1. ILQ clients were mostly IBs. How does this affect OANDA’s business? Is the IB model winding down?
IBs definitely have a role to play in the retail forex industry. Whether traders are using IBs or going direct to brokers, the key is for them to be making informed decisions. There are a lot of considerations when choosing with whom you should trust your investment and increasingly retail traders are asking the tough questions, like looking at regulatory records, asking about commissions and hidden fees, etc. Traders should demand true transparency from their IB and/or their broker.
In terms of our business, we are confident that any trader (and IB) looking for a new broker and asking those tough questions, will consider OANDA a top contender.
2. Following the closure of ILQ, can we expect more shutdowns or M&A action in the US forex industry?
Looking at the movements in the past year or so, I think we can expect to see more consolidation in the forex industry globally, not just in the U.S. Increasingly, there are more stringent demands on players in the industry (e.g., increased regulatory requirements, increased capital requirements, as well as increasing customer demands), which fewer and fewer brokers can comply with.
3. Do you have any other comments related to this news?
I want to confirm OANDA’s committed to the U.S. market. We see strong demand for our products and services in the U.S., as we maintain high liquidity, a high-performing platform, exceptional customer service, and a blemish-free regulatory record. In fact, we’re expanding our operations in the U.S. and will share more specifics on that soon.
We see opportunity for growth in the U.S. market. Especially as investors look to diversify their portfolios and see retail forex as an investment opportunity, the market will grow. And as new traders enter forex, and ask those tough questions of brokers, we know OANDA will be a top contender as their broker of choice.
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