Broker XTB says it’s business as usual, takes a shot at SNB
Tom Roberts, the Head of Digital Marketing at XTB Online Trading in the UK sent us a note to say it’s business as usual and the broker hasn’t been affected then called the SNB callous and irresponsible.
Following yesterday’s shocking announcement from the SNB, we’ve seen a lot of brokers come under pressure. Indeed Alpari and Excel Markets have already fallen as some of the first victims. There’s speculation that FXCM might soon follow them.First of all, I’m happy to say that at XTB we’ve not been affected. In fact, it has been business as usual for us. Some have called us lucky – but 2 months ago our trading team made the decision to reduce our leverage limit on CHF pairs to 1:50 (2%), so our exposure to the movement has been effectively risk managed. That’s not luck. Looking at Excel and Alpari, who advertised 1:400 and 1:500 leverage on their FX pairs respectively, you can see why such a dramatic movement has caused so much damage.People might look at the brokers left standing and now think we’re gleefully fighting to pick up the scraps (a vulture metaphor comes in mind). Nothing is further from the truth. No one in the industry wants to see this – with the primary concern being with the clients whose money is at stake. For Alpari’s UK clients, £50,000 of deposits will be covered by the Financial Services Compensation Scheme (FSCS). At XTB we have the same scheme as part of our FCA regulation.But the fact of the matter is that the SNB has acted in a callous and irresponsible manner. Not only do traders face a period of uncertainty, the ramifications of at least 1 FCA regulated broker going insolvent could be huge. Will they address people being able to trade on leverage? Will they review the industry as a whole? Whatever the outcome, it is unlikely that they will turn a blind eye to current proceedings.I’m thankful that our XTB clients are safe and trading as normal – but I feel that the industry has just taken one giant kick in the…teeth.