There could be tough times ahead for brokers in the forex industry given the precedents; since the beginning of the year, several forex brokers have made the decision to shut their doors and close up shop; GFT is just the latest in a string of forex broker-related closures or restructurings. Earlier this week, GFT had reported that it was pulling out of the U.S. and Japanese markets, a move that the company's management called "?strategic repositioning." In other words, the head of GFT said that in those markets they will focus primarily on institutional investors and to that end will be shifting their U.S.-based retail trade to another broker, "?trusted partner," TD Ameritrade; likewise, the Japanese retail trade will be handed over to a Japan-based partner.
Last month, Saxo Bank reported that it had sacked 250 employees, equivalent to more than 10% of their staff, who worked at their headquarters in Copenhagen, Denmark. Saxo had reported that in the first half of the year their net profit had declined some 88%, and though there was no fear that they'd be going under, it was by necessity that they had to cull their workforce.
Meanwhile Forex broker OANDA last month reported that they were closing up their operations in Dubai as part and parcel of their consolidation of international operations with operations for the Middle East now being undertaken at their headquarters in the U.K.
Industry analysts say that this year has been one of the toughest for forex brokers, and they don't expect a break in the trend any time soon. Some forex traders might be disappointed by the turn of events, but whether you call it survival of the fittest or an "?adapt or die" philosophy, it's important to understand that the brokers are merely doing what they need to do in order to survive and to continue providing quality services and the highest level of care for their existing customers given the parameters that they have been forced to work within.
But it's not all bad news; while some Forex brokers' strategy might be to get out altogether, others are looking for alternative ways to improve their bottom line, and rather than cost cutting they're looking at the revenue side. While some government regulators might make Forex brokers jump through all sorts of hoops to conduct business in their country, brokers realize that there are opportunities awaiting elsewhere and are eager to seek out those which are more welcoming and markets which may be underserved. Last month, Thinkforex announced that it had established operations in Sydney, Australia, and has secured the appropriate license and registration from the Australian Securities and Investments Commission to launch Thinkforex Australia. Many industry analysts believe that there is great potential in the Pacific Rim market and a tremendous opportunity for forex traders and brokers alike, and further proof of this is the fact that the largest Forex expo ever, the iFXEXPO, will be arriving in the region next month. DailyForex will be there to cover the event and to update traders about the latest industry news, from regulation changes to technological advances.