Hello there,
a few days ago FXCM made the following announcement:
"As BREXIT approaches, there is still a great deal of uncertainty and many of our traders are beginning to wonder how their trading accounts will be affected. As a European resident trading with Forex Capital Markets Limited (“FXCM LTD”), you may be particularly concerned with your account status as the UK prepares to withdraw from the European Union (“EU”) on 31 December 2020 .
…
We are pleased to announce the launch of FXCM EU Limited (“FXCM EU”): our newest FXCM Group entity based in Cyprus, authorized and regulated by the Cyprus Securities and Exchange Commission (“CySEC”) under registration number 392/20.
"
They suggest that the customer has to request a new account by their new company FXCM EU Limited.
The customer will keep the spread, leverage, etc. and his funds and will be able to trade as earlier (that is what they promise).
BUT there is a condition:
"– Your open positions with FXCM LTD will be closed and new identical positions opened, at the original open rate, in your FXCM EU account. "
This means that the customer will have to take the immediate loss of the closing of all currently negative positions.
Is this legal? Is there a way to be avoided?
Does someone know what would happen if a EU based customer does not request the new account and keeps trading with the UK based account after the Brexit?
Many thanks in advance!
ill respond specially for the part that fxcm change of location from UK to cyprus. this is an horrific redflag
usually brokers in cyprus are dishonest, personally if i was an fxcm client : i’ll be changing of broker right now and getting one approved by the financial institutions of your country with society building in the city
For exemple a broker like IG are approved by financial institutions (regulated) and have a building in London and Paris
Xtb approved by financial institutions(regulated) ,have a building in London and Paris
you have more legal protections if they are regulated by financial institutions and have their building in big european cities/american cities (it can save your ass if you have a problem with them, you bring them to court and they give your money back. but if they are in cyprus you dont have this possibility from what I understood)
hope you understood
Thanks a lot for the answer and for the advice - it make sense.
Could you also advice/do you know what the consequence would be of keeping the account in GB as an EU citizen. Would it be impossible? Would there be a gratis period to close the account etc. …? Are they allowed to force close it after the Brexit?
cant respond 100% affirmatively to this. i let people who know respond to this
call the fxcm callcenter, they will respond to you
My problem is not changing the broker - I would do it …
but at the moment I have several long term open positions - if they do not come on profit by the end of the year and FXCM close them I will lose the money. I prefer to let them opened until they win or stop/loss occur. After that I can close my account and change the broker etc. …
Request EU Account - FXCM UK
See CAN I STAY WITH FXCM LTD?
Thank you very much for the link. I’ve already wrote en email to the fxcm and waiting fo the response.
It strange because they send me an email where it is written:
Your open positions with FXCM LTD will be closed and new identical positions opened, at the original open rate, in your FXCM EU account.
which means I would have to take the current losses (assuming they will close the positions on the actual currency rate).
But on the page you sent it is written
Your open positions will be closed at the original open rate of the position and a new identical position will be opened in your FXCM EU account.
Your open positions will be closed at the original open rate of the position - which means there won’t be any loss - the position will be just copied.
Yes their wording is not clear - you are right to get clarification.
I’d say the latter will be the case - everything the same except a different entity.
That is too bad but one good thing is that they at least made an announcement beforehand.
It’s good that a trader wants to use a single broker because it fits their requirement completely but it doesn’t mean that other brokers are not worth it. You can always create demo accounts with different brokers and test them without risking your money. If they suit, you can invest your money with them also.