FXCM, also known as Forex Capital Markets, is a retail foreign exchange broker, now run from London after being banned from United States markets for defrauding its customers. Its former parent company, Global Brokerage, Inc. filed for bankruptcy on December 11, 2017. The operating company, known as FXCM Group, is now owned by Jefferies Financial Group, which changed its name from Leucadia National Corporation in 2018.
FXCM allows retail clients to speculate on the foreign exchange market and provides trading in contract for difference (CFDs) on major indices and commodities such as gold and crude oil. Global Brokerage shareholders lost over 98% of their investment since January 2015.
On February 6, 2017 the firm agreed to pay a $7 million penalty to settle a suit from the U.S. Commodity Futures Trading Commission (CFTC) involving fraudulent misrepresentation by FXCM to its customers and to regulators. FXCM withdrew its CFTC registration and agreed not to re-register in the future, effectively banning it from trading in the United States. Three top managers resigned under regulatory pressure and the majority owner of the firm changed its name to Global Brokerage Inc., effective January 27, 2017.
A Managing Director of Leucadia National Corp, which before the bankruptcy held a 49.9% equity stake in the operating company, was been appointed chairman of the FXCM Group board. Its U.S. accounts were sold to Gain Capital. About 40,000 customer accounts were sold at about $375 each.
Since inception, FXCM has gained industry-wide recognition. This is accentuated by a long list of awards and accolades for provision of brokerage and trade-related services.
The forex and CFD marketplaces are international venues, including participants from every corner of the globe. In order to provide premium forex/CFD market access to over 130,000 customer accounts worldwide, FXCM has built a vast infrastructure of associates and third-party affiliates capable of enhancing the trading experience.
Since 1999, FXCM has been on the leading-edge of the forex market. From technological proficiency to the creation of common sense solutions, FXCM has garnered many acknowledgements and accolades while promoting the advancement of the forex and CFD.
Staying an industry leader in a fast-moving, competitive environment such as forex can be a challenge. As a testament to a tireless dedication to the customer, FXCM is widely recognized as a premier brokerage for both retail and institutional clientele.
The Companies That Make Up the FXCM Group Are Regulated In Several Jurisdictions. As a vocal advocate of foreign exchange regulation and increased investor protection, the FXCM group of companies (collectively, the “FXCM Group”) has companies registered and regulated by many of the most respected regulatory bodies in the world.
Forex Capital Markets Limited (FXCM LTD) is regulated by the Financial Conduct Authority (FCA) in the UK.
FINANCIAL STANDARDS AND OVERSIGHT
According to FCA regulations, FXCM LTD must meet strict financial standards, including capital adequacy requirements. On a regular basis, FXCM LTD is required to submit financial reports to regulators. These standards are enforced by the FCA, which has the right to fine firms and terminate their regulatory status for violations.
GREATER TRANSPARENCY OF BUSINESS PRACTICES
The FCA keeps records of all formal proceedings against regulated entities. Visit the Financial Services Register to search the firm’s history with the FCA.
Additionally, accounts with FXCM LTD are segregated in accordance with FCA client money rules. Accordingly, in the unlikely event of default, client funds held in segregated accounts are protected, and cannot be used to benefit other creditors. Learn more about safety of client funds.
Risk Warning: Our service includes products that are traded on margin and carry a risk of losses in excess of your deposited funds. The products may not be suitable for all investors. Please ensure that you fully understand the risks involved.
With FXCM you pay only the spread to trade forex. So, you never have to anticipate commissions down the road. With spreads-only trading, your platform calculates your transaction costs automatically using this formula:
FXCM is a very big Forex broker with plenty of thousand traders and with a high trafficked website. But you don’t hear only good things about FXCM. Quite the reverse: You hear a lot of bad things. Of course, there are complaints about any (!) Forex broker but in the case of FXCM it does not look very good. We collected the trader opinions and experiences for you that you can judge whether FXCM is a scam or not.
One of the most common complaints is that everything works smoothly with FXCM if you lose. But if you’re trading profitably the story begins. They close positions or even your account for no real reasons. This is the most common way for a broker to cheat on its traders. Closing your trades is not possible for the following reasons: “Data not found”, “Waiting for Dealer”, “Your order didn’t execute because price moved”.
There are also complaints about the bad costumer support. They seem not to act in the trader’s favor and sometimes don’t even care about costumer complaints.
Of course, there are traders that are happy with FXCM but there are not many of them. There was also a law suit against FXCM a few years ago.
Although it seems that there was no result that does not mean that FXCM is reliable. The complaints are very serious. Also, it seems that there are differences between hourly and daily charts which is strange. It seems that short term charts look different to “help” traders making the wrong decision.
Traders also talk about margin calls that should not be executed.
If you look at the websites of the NFA you can see that FXCM already had to pay a serious fine. You can read more about it here.
You can’t really prove that FXCM is a scam, but you can say that there are a lot of strange things going on and it is not a reliable Forex broker at all.
Experiences with FXCM
Let’s take a look at other trader’s experiences with FXCM.
I opened a position and placed a stop loss. I left my PC afterwards for half an hour. After coming back the stop loss was executed although the chart did not even touch my stop loss. I tried to talk to their customer support and they said that I closed the position myself a few minutes after opening it. Another employee told me to take a look at it, but he never came back to me.
They changed my stop loss without any action from my part.
FXCM is a good and reliable broker. I’m trading every day and I’m earning every day.
My experiences with FXCM are good so far.
I can’t recommend FXCM. Rollover fees are way too high. You can’t execute a trade all the time when it does not work in the broker’s favor.
FXCM is a solid broker with a good platform. As a result of its international operations, FXCM is regulated in several jurisdictions. The main regulatory oversight over FXCM is provided by the UK’s Financial Conduct Authority (FCA) under the FCA registration number 217689. With its FCA’s registration, FXCM is also permitted to operate in member states of the European Union by “passporting” its FCA license for registration in the member states which they operate in, particularly:
France by registering with the Autorité de Contrôle Prudentiel (ACP) under the Interbank Code: 19843.
Germany with BaFin Registration Number: 122556.
Greece by registering with the Hellenic Capital Markets Commission
Italy by registering with Nazionale per le Societa e la Borsa (CONSOB)
Through its subsidiaries, FXCM is regulated in the following countries:
- In Australia regulated by Australian Securities and Investments Commission (ASIC) through the License number 30973 issued to FXCM AUSTRALIA PTY LTD.
- In Japan through the FXCM GLOBAL SERVICES LLC, TOKYO.
- In Hong Kong, through FXCM BULLION LIMITED
- In Israel through FXCM ISRAEL LIMITED
- In South Africa through FXCM SOUTH AFRICA (PTY) LTD regulated by the Financial Services Board, under the registration # 46534.
FXCM Markets Review:
FXCM (Forex Capital Markets) is one of the pioneering brokers of internet-based trading. They offer trading of Forex, Stocks, Commodities, Indices, Spread Betting and CFD’s across hundreds of securities. The broker was established in the U.S in 1999 and was previously listed as one of the fastest growing companies in the U.S for 3 consecutive years by Inc. 500 List of America’s Fastest Growing Companies. Although based in New York, FXCM is a broker with a global reach extending to markets such as Australia, France, UK, and Italy. However, as of 27th January 2017, FXCM has ceased its operations in the U.S to focus more on their international markets particularly the European sector.