FXCM Inc. said it would increase its margin requirements for
foreign-exchange products globally, as well as gold in overseas
jurisdictions, pointing to currency volatility that the
foreign-exchange broker said could roil markets throughout this
year.
The decision, which is effective Wednesday, raises the amount of
collateral investors must provide upfront as a percentage of any
trade and comes after foreign-exchange brokers like FXCM were hit
hard after the Swiss National Bank moved last week to stop reining
in the value of the franc against the euro.
FXCM on Friday accepted a $300 million, two-year loan from
Jefferies Group LLC parent Leucadia National Corp. to cover client
losses stemming from the decision.
In Wednesday's statement, FXCM said it believes there is a high
level of uncertainty in the currency markets that could destabilize
markets throughout 2015. It specifically pointed to the ECB rate
decision on Thursday and the Greek Election on Sunday.
"FXCM would like to reiterate that trading on FXCM's systems
continues in the normal course of business," said Drew Niv, CEO of
FXCM. "It is important to stress that FXCM isn't insolvent, has not
filed for any form of bankruptcy, and is in compliance with all
regulatory capital requirements in the jurisdictions in which it
operates," he added.
Brokerage Interactive Brokers Group Inc. also said Tuesday that
it expects to increase margin requirements. The firm said clients
lost about $120 million on Thursday after the franc surged against
the euro and other currencies. The broker is unlikely to recover
those losses, Chief Executive Thomas Peterffy said.
Write to Tess Stynes at tess.stynes@wsj.com
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