Abshire-Smith winds down UK operations due to the tough EU regulatory regime

A regulatory filing with the UK’s Companies House revealed that London-based forex and CFD brokerage Abshire-Smith is closing down its operations in the United Kingdom. The reason for the move is Brexit, as well as the restrictions on CFD trades imposed by European Securities and Markets Authority (ESMA) since last year.

The news of Abshire-Smith winding down its UK operations comes several weeks after another two brokerages, Fixi Markets and Formax Prime have announced closing its doors in the country. Fixi Markets ceased operations in December last year and all client funds have been frozen by the FCA. It appears that the UK regulator is currently investigating the company’s accounts. As regards Formax Prime, it also shut down in December, allegedly due to the tough regulatory regime across the EU.

This was expected consequences, I think, after the new regulatory measures. They won’t be the last.

Just pray they don’t adopt the Dodd-Frank rules.

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…soon to be updated by the Waters-(fill in the blank) rules…

Check out Co House - 13th Jan 2015

https://beta.companieshouse.gov.uk/company/07894030/filing-history

Do you think that’s actually possible?
Then again, a few years ago I didn’t believe Brexit was possible…

anything is possible, just depends on who stands to gain the most and has the most to make it happen.

If it’s real concern, then it might be a prudent approach to re-engineer your own trading method so that such potential account restrictions won’t affect you - rather than having to do this at the point in time of new regulation coming in?

Most sound trading methods can be scaled, in both directions, to take into account both leverage limitations & margin requirements [should they be adjusted].

I trade both under the US rules and non US rules now but its not so much the leverage requirements, it is the FIFO and hedging rules which can be worked around with some effort.

Agreed - and this is where the majority of my own effort has been placed over the past six months, to try and find a middle ground. I’ve never hedged, and don’t use it as a standalone rule, but rarely I would have been looking at taking a longer term short with a shorter term long position; which could be problematic in the same pair / asset if FIFO rule was to be applied.

Bacon, I agree on the hedging, I will only hedge if the pair’s price action is outside of its range for a quick breakout, even then I am very cautious building an opposite the trend position.