There’s lots of action in the forex industry towards the Easter holiday. dbFX, one of the highly regarded forex brokers, and forex retail bank (backed by the huge Deutsche Bank) is shutting down its operations and moving willing clients to forex.com (Gain Capital).
Michael Greenberg reports and analyzes:
Gain Capital is the big winner here as it acquires client assets (of those who’ll agree to this move) of dbFX’s current clients while FXCM loses what’s probably its largest White Label. In the latest chapter of the battle between two largest US forex brokers Gain Capital takes the upper hand.
I believe that FXCM is still larger than Gain Capital after this move, with Oanda playing in the same league.
The second report that Michael provides is related to a broker that just launched in the US: TradeStation. Well, it just sold itself to the Japanase Monex group for $411 million. Here’s his comment about the move:
This move by Monex Group however makes a lot of sense as profits in Japan fall and can only be balanced by either consolidating locally or expanding overseas. TradeStation, a relatively small broker, is certainly an attractive target and is now in a poll position with its unique trading platform to expand in the US retail forex market as well.
All over the world, there are lots of forex brokers, with each having a relatively small share of the markets. Even in the limited scope of regulated forex brokers in the US, there are still more than 10 brokers, with no single broker having the upper hand.
I guess we’ll see more M&A action in the forex industry throughout 2011 – more consolidation moves that reflect a maturing industry.
Competition is definitely a good thing, but at the current distribution, we can have somewhat less forex brokers, still have a good competition, but also bigger forces that can progress more rapidly and eventually make better offers to their clients.
What do you think?
Further reading: 5 Points on How to Chose a Forex Broker in 2011Get the 5 most predictable currency pairs