Forex Magnates Q1 2013 Industry Report Preview

FOREX MAGNATES QUARTERLY MARKET
REPORT FOR Q1 2013

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Content Index
1. Q1 2013 Forex Market Overview page 7
2. Institutional and Retail Forex Volumes page 10
3.Exchanges Update Q1 2013 page 23
4.Binary Options Update Glass Ceiling and Regulation
page 24
5. Media Forex Websites Trafc Survey: Q1 2013 page 25
6. Articles:
lFEPO Macau B2B Forex Oonference Rev|ew - page 31
A F|ne Ba|ance - Strateg|c and Techno|og|ca| R|sk
Management page 33
Po|nt to Po|nt Pr|vate Networks - Oonnect|ng Traders To
Liquidity - page 39
Oustomer Engagement So|ut|ons - An Automat|c Oho|ce
- page 43
South Afr|ca - A Wea|th Of Resources, A Wea|th Of lnves-
tors page 46
v|ew From The North - Scand|nav|a Shows Strength and
Stability Evolving Every Step of the Way page 51
Hong Kong - The B|g App|e of The Far East- page 56
Reg|ona| Overv|ew Greece - page 61
Reg|ona| Overv|ew Russ|a - page 62
Reg|ona| Overv|ew Turkey - page 63
Reg|ona| Overv|ew Oh|na - page 64
The Emergence of Oommod|ty Exchanges - As|a Forg|ng
Ahead page 67
Focus on The M|dd|e East - page 74
Th|rd Party Ana|ys|s - Do|ng Your Research For You
page 78
At The Sharp End - Mu|t|-Bank Porta|s v|e For Supremacy
page 81
B|nary Opt|ons - O1 lndustry Rev|ew - page 87
Secur|ty of Funds - An lns|ght |nto Respons|b|||ty - page 95
Oom|ng Soon: Br|dge|ess MT4 - page 101
F Sett|ement - Gett|ng You Your Money - page 106
The lntegrat|on of Aggregat|on - O|t|F TradeStream
page 112
7. Major News of the Ouarter - page 114
8. Deta||ed broker |nformat|on for the |argest brokers |n terms
of volume page 151
9. Recommended Serv|ce Prov|ders - page 169
10. Forex Industry Biggest M&As and Investments
page 177
Q1 2013 Forex Market
Overview
Starting the year on a fresh page, after a weak 2012 for the
industry, 2013 began with a bang. The combination of a spike
in currency volatility along with increases in client assets that
took place during 2012 led to record volumes occurring in
the retail space. While last year was known for consolidation,
2013 could see a return to aggressive expansion take place.
While the euphoria was appreciated across the globe, one re-
gion that suffered during the quarter was Cyprus and its forex
sector.With the country in the midst of a nancial crisis, a hair-
cut on bank deposits was proposed by the government. The
events caused a decline in condence to local rms. The result
of this loss of condence will take some time to propagate
but what appears to be an interim solution going forward is
that most local brokers will stay regulated in Cyprus due to
easygoing local regulation but will keep corporate and client
bank accounts offshore. Other key events during the quar-
ter included further encroachment by MetaQuotes with its 3rd
party providers and changes in regulation.
Spiking Volume The Japanese yen began to heat up at
the end of 2012, and then really got going during 2013 as
the Bank of Japan is presently involved with an aggressive
stimulus policy to invigorate the local economy. The result was
a much weaker Yen. In addition, fellow currencies also joined
the party as large moves in the euro triggered an increase of
overall currency activity to start the year. For brokers, the re-
turn of volatility not only drove volumes well above 2012 levels,
but led to multiple records to be broken. Most notable were
volume gures in Japan, where the worlds largest retail bro-
ker by volume, GMO Click Securities achieved a global record
for monthly trading of $861.7 billion in February. Similarly, fel-
Monthly Totals (in Billions)
Average Daily Volumes (in Billions)
-
5.000,0
10.000,0
15.000,0
20.000,0
25.000,0
M
a
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1
2
A
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1
2
D
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1
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J
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1
3
F
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b

1
3
EBS
FXal l ***
Hotspot
Reuters
FXCM
CLS Bank****
CME*
TFX (Cl i ck 365)*
GTX **
-
200,0
400,0
600,0
800,0
1.000,0
1.200,0
M
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1
2
A
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1
2
M
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1
2
J
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S
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1
2
O
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1
2
N
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1
2
D
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1
2
J
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1
3
F
e
b

1
3
EBS
FXal l ***
Hotspot
Reuters
FXCM
CLS Bank****
CME*
TFX (Cl i ck 365)*
GTX**
0
100
200
300
400
500
600
700
800
900
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
GMO FXCM Saxo Bank DMM.com Gai tame Onl i ne Cyber Agent FX
Q1 2013
Performance of the top 6 global forex brokers in past 12 months
Top 6 Largest Global Brokers
Money Partners
6%
SBl 4%
F Trad|ng
Systems 4%
Cyber
Agent F
9%
H|rose Tsusho
4%
Gaitame.com
3%
IG Group 3%
Oanda 3%
Traders Securities
3%
Alpari
5%
oup 3%
Systems 4%
Saxo Bank
6%
Gaitame
Online
7%
FOM
8%
DMM
15%
GMO Click 20%
Dur|ng January, Forex Magnates co-hosted the lFEPO
Forex Oonference |n Macau together w|th Oonvers|onPros.
The event was the largest Asian B2B forex conference ever to
have taken place. Joining 60 sponsors were over 1,200 at-
tendees from the entire Asian region encompassing key coun-
tries such as Japan, India, Indonesia, Singapore and China.
The two day event provided a combination of networking and
educational opportunities for attendees. Exhibiting western
rms gained exposure to what was for many an entirely new
audience. It also allowed companies to learn about the cur-
rent demands and interests within the region. Many exhibitors
made their rst trips to this part of the world culminating in
one particular common positive feedback received by Forex
Magnates being the strong interest in forex and trading oppor-
tunities in Asia. With much of the industry seeing contraction
take place over 2012, the strong demand in Asia contrasted
with the overall global scene. The contrast and importance of
Asia was highlighted during January, as major Japanese forex
brokers had all reported record volumes on the heels of surg-
ing trading in the Yen.
The rst day event opened with a traditional awakening of the dragon ceremony
IFXEXPO Macau B2B Forex Conference Review
In addition to the vast networking opportunities, the event
featured numerous expert panels for attendees to learn more
about the |ndustry. Pane| d|scuss|ons covered top|cs such as
||qu|d|ty, mob||e trad|ng, South East As|a`s F & OFD market, ln-
dia, execution, social trading, commodities and binary options.
Review of Key Panels:
Mobile Trading Panel
For Forex Magnates, the Mob||e Trad|ng Pane| was an eager|y
awaited discussion as it was moderated by our very own Adil
Siddiqui and covered a topic that is one of the most important
trends taking place in forex trading. Over 2012 we saw lead-
|ng brokers Saxo Bank, Ga|n Oap|ta|, OANDA, and lG Group
all post high penetration of their mobile trading platform and
announce that mobile is a key focus of their business.
Whilst panelists were equally excited about the prospects of
mobile, leading the discussion was Vinod Muthukrishnan from
Market Simplied whose company provides mobile solutions
Point to Point Private Networks Connecting Traders To Liquidity
How often does th|s happen? A broker spends m||||ons of
dollars on colocating its servers near exchanges and liquid-
ity providers, buying the fastest servers, and developing ex-
ible front-end trading platforms, all to ensure their clients have
access to low latency pricing. But despite this, clients from
around the world still cannot take advantage of the low latency
solution due to network bottlenecks between themselves and
the broker. This can happen whether it is a trader accessing
the network from an emerging market or even from a neigh-
boring country.
With the maze of telecom companies, ber optic cables, and
jumps needed to connect between two parties, latency through
public networks is a given and often hard to forecast. Even
when a trader does have a smooth connection, continued tele-
com consolidation and the buildup of new networks can create
changes overnight that can hamper the broker/client link.
So|v|ng th|s prob|em are pr|vate networks. Pr|vate networks
consist of point to point connections where a trader connects
to a local high-speed network, which is linked to the interna-
tional broker. The result is that rather than depending on public
networks to reach the foreign broker, all they have to worry
about is connecting with a local destination.
Using point to point connections, brokers can establish local
access points where their clients can leverage the high speed
network to take advantage of rms low latency solutions on
which they spent large sums of money to create. This can be-
come especially useful in attracting clients in foreign countries
where rms can boast that their clients will be on pretty much
the same playing eld as those next door to the broker.
Milliseconds Count
When speaking to traders and network vendors, the need for
speed is an overall theme. With billions of dollars on the line,
having the fastest execution often means getting lled before
the competition. This has become increasingly the case in re-
cent times with much of the worlds trading being executed
electronically, and automated strategies that hone in on mar-
ket inefciencies that may only exist for mere seconds.
Even among traditional over the phone and point and click
trading, the bottom line is that there is another trader on the
phone or with a computer in a building next door that is com-
peting for the same trade. Specically, when trading across
different countries, having access to a faster connection is a
vital factor when competing against local traders. As such,
point to point connections along with colocation of hosting
solutions have become a staple of every advanced nancial
rm around the world.
Opening Up New Markets
With Europe being in the midst of a nancial credit crisis, the
K exper|enc|ng auster|ty measures, and the S on|y recent|y
seeing itself make a reversal from the 2008-9 economic col-
lapse, brokers and banks have been looking beyond the es-
tablished nancial centers for new clients.
Increasingly, industry focus has moved towards emerging
markets, specically, China, Brazil, Russia, and South East
Asia. Competing against domestic players, foreign rms have
targeted these new regions with the establishment of local of-
ces. While entering a foreign country is tricky and requires an
eye of local customs and interests, western rms have seen
success in emerging markets.
Explaining the added value that
western rms provide, Fraser
Be||, Manag|ng D|rector at BSO
Network So|ut|ons wh|ch |s a
low latency global infrastructure
specialist said Talented people
are among the biggest thing that
global nancial rms bring when
they enter new markets. They
have people who have experi-
ence, knowledge and under-
standing in the industry and can
provide these skills to clients
in new regions. Also, western
rms bring the brand, and access of capital. As such, Bell,
whose company ass|sts frms spec|fca||y |n the K to open
overseas ofces, believes that due to the advantages western
companies provide, there are favorable opportunities when
expanding into emerging markets.
Also, while in the past rms may have needed to build out
much of their own infrastructure to operate a point to point
network, companies can nowadays take advantage of exist-
ing infrastructure, including ber routes and hosting facilities
at nancial hubs. Bell explained that they take advantage of
ber existing routes that can add value for customers, such
as between |ondon, Moscow, Duba|, or S|ngapore, where
Fraser Bell, Managing Director as
BSO Network Solutions
Hong Kong - The Big Apple of The Far East
The ex-British territory in the Far East has been striving to
maintain its golden historic reputation as a leader in nance
and economy within the British Empire. Conveniently located
as a br|dge between the Far East and Oentra| As|a |ead|ng
onto Europe} the |s|and of Hong Kong has trad|t|ona||y been a
strategic place for trade and commerce.
It still enjoys semi independence but since Britain handed
control of the territory back to China in 1997, it now lives
in the lengthy shadow cast by mainland China. It has po-
sitioned itself as the visa ofce for doing business in Chi-
na and subsequent to the Chinese economic revolution the
crossing station for Chinese rms looking to go global. It is
regarded as the 6th largest foreign exchange market, and on
th|s bas|s we rev|ew the Hong Kong marg|n trad|ng market
and investigate as to whether it lives up to its overall reputation
as Asias nancial capital.
The Economy
Hong Kong has an economy of $250 b||||on, the 40th |argest
in the world. The island nation is regarded as being home to
the worlds freest economy, according to Index of Economic
Freedom since the inception of the index in 1995.
Governed under pos|t|ve non-|ntervent|on|sm, Hong Kong |s
highly dependent on international trade and nance and in
2009 the real economic growth fell by 2.8% as a result of the
global nancial turmoil.
The country has experienced substantial economic devel-
opment over the |ast 30 years. The growth rate |n Hong
Kong |s reported by the Oensus & Stat|st|cs Department.
H|stor|ca||y, from 1990 unt|| 2012, Hong Kong GDP Growth
Rate averaged 0.98%, reaching an all-time high of 6.30%
in September of 2003 and a record low of -3.50% in March
of 2009. Hong Kong a|ong w|th S|ngapore, South Korea and
Taiwan is one of the Four Asian Tigers.
Being conveniently located adjacent to southern China,
with some of the country actually situated on the mainland,
Hong Kong |s the seventh |argest port |n the wor|d and sec-
ond on|y to New York and Rotterdam |n terms of conta|ner
throughput.
The Banking Sector
Hong Kong |s un|que |n |ts bank|ng structure, as there |s no
central bank, therefore banking is free and market driven. The
Monetary Author|ty HKMA} regu|ates banks and there are
211 authorised nancial institutions including giants such as
Han Sen Bank, Hong Kong Shangha| Bank|ng Oorporat|on
HSBO}, and Bank of Oh|na.
Desp|te banks tak|ng a major h|t post 2008 recess|on Hong
Kong`s fnanc|a| |nst|tut|ons performed we||.
Accord|ng to the HKMA`s Ha|f-Year|y Monetary and F|nanc|a|
Stability Report, the consolidated capital adequacy ratio of lo-
cally incorporated authorized institutions edged up to 15.9%
at the end of June 2011, from 15.8% at the end of 2010. The
t|er-one cap|ta| adequacy rat|o the rat|o of t|er-one cap|ta| to
tota| r|sk-we|ghted assets} |ncreased to 12.5%, from 12.2%.
The HKMA report showed that at the end of September
2011, there were 151 ||censed banks 128 of wh|ch were |n-
corporated outs|de Hong Kong}, 19 restr|cted ||cense banks
of wh|ch seven were |ncorporated outs|de Hong Kong} and
26 depos|t-tak|ng compan|es |n bus|ness a|| |ncorporated
|n Hong Kong}. These 196 author|zed |nst|tut|ons operate a
comprehensive network of 1,300 local branches. In addi-
tion, there were 65 local representative ofces of overseas
banks |n Hong Kong.
Total Employment in the sector is around 80,000. Banking as-
sets amount to more than HKD10 tr||||on.
Stock Markets
Hong Kong`s stock trad|ng sector has |ts h|stor|c roots |n the
equity markets, and the rst formal securities market place
HSBCs Hong Kong Ofce
KEY FACTS:
Population: 11,194,000 2011 fgures}
Currency: Euro ER}
Membership: EU, Eurozone
Regulator: He||en|c Oap|ta| Market Oomm|ss|on HOMO}
Economic Overview:
With the exception of the Greek economic miracle period of
1950-1973 where GDP growth averaged 7%, the country has
consistently suffered many economic peaks and valleys. Re-
cently, since inclusion in the Eurozone, the country underwent
another period of prosperity as the standard of living rose to
near parity with Western neighbors such as France, and the
relatively high unemployment levels became manageable.
However, due to |ax tax revenue co||ect|ons and |ncreas|ng gov-
ernment budgets, the country has been hit by a severe credit
crunch. The crisis led Greece to enact austerity budgets, collect
bailout funds from the EU and IMF, as well as restructure its debt.
The problems led to riots and speculation of whether the country
being booted out of the Eurozone. Economically, tourism, the
countrys most important industry has been hit hard as tourists
have worried about violence taking place.
Forex Landscape

Although the country is home to a sizable population, the forex
trad|ng |ndustry |n Greece |s qu|te sma||. However, the country
does have an active trading population as witnessed by its
well-developed capital markets structure which includes re-
gional equity and derivatives exchanges. Another factor that
has led to the slow adoption of forex trading is the Greek lan-
guage. With a small global population of speakers, foreign
brokers have been slow to rollout Greek language sites and
market|ng mater|a|s to target the country. However, th|s has
been changing as Cyprus has become a growing international
center for forex brokers. As such, with an established base
of traders, and growing Greek language forex sites, there is
potential for faster growth to take place as the country rights
itself following the current economic crisis.

With a small contingent of traders, the majority of local pres-
ence is through foreign brokers with ofces in the country;
Regional Overview
Greece
Being included in the Eurozone has kept Greeces ination in check. However,
it has also limited the countrys ability to devalue its currency to stimulate trade
growth. This led Greeces main export and tourism industry to be less attrac-
tive to foreign buyers and has contributed to continued high unemployment.
As seen below, even before the countrys current credit crisis, jobless rates
have been an ongoing problem since 2000.
alongside local rms who are IBs are larger brokers. The only
notable Greek broker is AAAFx, which is closely aligned with
Zu|uTrade. A|though HOMO ||censed and |ocated |n Greece,
the broker has very few Greek clients with the majority being
g|oba| traders referred to |t through Zu|uTrade. Among fore|gn
brokers w|th |oca| offces, Saxo Bank and FOM have the |arg-
est client base in the country. More prevalent in Greece are
Cyprus based brokers which compose the largest group of
foreign companies marketing in Greece.
As the forex industry is not very developed in Greece, brokers
marketing their services in the country are advised to use gen-
eral media portals to reach potential clients. Major portals that
contain nance sections include http://www.newsit.gr, http://
nance.in.gr, and http://www.protothema.gr/economy.
Finance specic sites include http://www.greekmoney.gr,
http://www.imerisia.gr, http://www.express.gr
Expanded Report is available in Forex Magnates web-
sites Research section.

Average ination rate in 2000-2011
0,0%
0,5%
1,0%
1,5%
2,0%
2,5%
3,0%
3,5%
4,0%
4,5%
5,0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Unemployment rate in 2000-2011
0,00%
2,00%
4,00%
6,00%
8,00%
10,00%
12,00%
14,00%
16,00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
At The Sharp End Multi-Bank Portals Vie For Supremacy
The decade long battle between single bank and multi bank
platforms has taken an interesting turn during the last 12
months as a sudden |nfux of F EONs came |nto the ||me-
||ght. E|ectron|c trad|ng |n F markets was dom|nated by the
mammoth banks during the course of the 1990s, and with the
advent of techno|ogy the b|rth of EONs took p|ace |n currency
trading. The multi bank players performed a key role in the
overall sophistication of the market as exible and innovative
ideas came into being, resulting in the waking up of the devel-
opment teams |n R&D |abs of the banks. The mu|t| bank p|ay-
ers dried up in the latter part of the last decade but signicant
changes in the operations of the market and new entrants in
the F markets now mean that |t`s an open p|ay|ng fe|d aga|n.
Background of the ECN Market
EONs have been prom|nent |n the e|ectron|c trad|ng market
over the |ast 20 years. MatchBook F was the frst EON wh|ch
was estab||shed a|most 20 years ago. MatchBook F cou|d
be considered to be the rst company providing an online
F trad|ng p|atform. Founded |n 1999, MatchBook F was
an eF p|oneer and he|ped move trad|ng away from vo|ce to
electronic trading. The rm was closed in 2002 after its parent
group suffered losses in the dot.com bubble.
S|nce the turn of the m|||enn|um, F EONs have been few
|n number. The pr|mary ro|e of the EON |s to s|mu|taneous|y
match two way prices in a cross network, connecting buy-
ers and sellers to multiple liquidity providers. Technological
enhancements have been driving volumes in the multi bank
direction as new trading styles such as high frequency trad-
ing have created an environment where orders are stripped
and chopped and aligned to several counterparties, an area in
which the single banks were less welcoming.
ln the ear|y years of the m|||enn|um the key F porta|s were
Fa||, Ourrenex and FOonnect. Fa|| and Ourrenex tended
to attract direct corporate customers and institutional traders
whereas FOonnect has tended to attract fund manager c||-
ents ma|n|y a|med at buy-s|de}. However, a|| are |ook|ng to
expand their customer base into other sectors, increasing
competition between the portals. The daily volumes through
these portals were a positive sign in the transition from voice
to electronic trading. Volume estimates suggested $7bn per
day |n May 2002 compared to $14bn per day by October
2002 accord|ng to a survey carr|ed out by O||entKnow|edge.
Hotspot F, an EON porta| |aunched |n 2001 showed ||ve de-
a|ab|e pr|ces, whereas Fa|| and Ourrenex d|sp|ayed the re-
quest for quote RFO}. Hotspot F |n|t|ated |ts re|gn w|th AlG
and Bear Stearns a|ong w|th 3 other F pr|me brokers.
Around the same time Atriax, a bank lead initiative to launch
the rst multi-asset trading platform went live with the leading
names |n F and rates back|ng |t. Atr|ax was deve|oped by
Integral and aimed to be the preferred venue for e-trading.
The 'Hare and Torto|se` race has had |ts vo|at||e phases where
Mu|t|-Dea|er Porta|s MDP} enjoyed success when frst |aunched,
but were qu|ck|y overtaken by S|ng|e-Dea|er Porta|s SDP}. The
r|se to prom|nence of SDPs occurred near the |atter end of the
|ast decade when banks were re-deve|op|ng the|r F PB un|ts on
the back of the AIG and Lehman downfall.
However th|s Dav|d and Go||ath batt|e
has its own charm. John Owens, Vice
Pres|dent, Exchanges and EONs at
TNS, a frm wh|ch prov|des connect|v-
|ty to banks and EON brokers, op|nes l
think that we are in a period of realign-
ment currently and although there is
competition, both types of platform can
co-ex|st. P|a|n van|||a trad|ng w||| grav|-
tate towards the multi bank platforms
while the single bank platforms will main-
tain a presence to provide the added level
of customer service and care required for
dealing with larger more complex trades. We must also remem-
ber there is a cultural issue to address, where relationships are
crucial, so maintaining that one-to-one relationship with a single
platform enhanced by electronics will add value.
The |ong stand|ng cat and mouse race between MDP & SDP
has been driving innovation in the market. Both segments
complement each other and in essence have their own posi-
t|on |n the market, EONs comp|ement banks through ga|n|ng
access to their network.
Joey Horow|tz, OTO of Trad|ng Po|nt be||eves that the batt|es
w||| cont|nue. He says S|ng|e bank porta|s w||| a|ways ex|st
because banks want to offer their unique value directly to cli-
ents and lock in their business. Multi-bank portals will con-
tinue to compete as they gradually merge into the greater
ma|nstream EON offer|ngs, EBS D|rect |s a good examp|e,
accessible easily by traders over the same widely recognized
John Owens, Vice
President, Exchanges
and ECNs at TNS
FX Settlement Getting You Your Money
If youve spent any time watching the chaos of the live trad-
ing pits at leading exchanges such as the CME, CBOT, or
NYSE, one of the b|g myster|es |s just how a|| these trades get
executed and reported. Within the maze of specialist booths
and ying paper, trades are being crossed and buyers and
sellers are recognized. While the occasional errors occur, this
wild system is highly efcient at reporting and settling trades.
In the world of OTC, settlement represents a larger factor, as
participants are not bound by a central exchange system that
insures against counterparty risk. As such, companies are on
their own to ensure that trades are settled correctly with their
counterparties and an exchange of funds takes place.
In this report, we take a look at the operations of the CLS
Bank and Tra|ana and how the|r products he|p F p|ayers han-
dle their settlement needs, create efcient markets, and lower
overall transaction costs.
CLS Bank
Launched in 2002, CLS Bank was created as a private sec-
tor initiative to deliver and operate services to mitigate settle-
ment r|sk |n the F market. Owned and operated by member
institutions and working alongside central banks, CLS offers
members the ability to settle trades within a central location,
thus prov|d|ng effc|enc|es to F markets.
To understand what CLS does, it is rst important to know
how settlement works. Settlement is the process in which the
payment and securities of a transaction are delivered. Within
the securities world, this occurs in a three day window. For
example, if a trader buys 100 shares of IBM stock at $100/
share, the broker has three days to collect the $10,000 from
the client, transfer it to the seller, and collect the shares back
for the client.
W|th|n F, sett|ement does not |nvo|ve secur|t|es, but |nstead
d|fferent currenc|es. Therefore, |n a ER/SD trade, the se||er
sends dollars while receiving euros. For OTC participants, one
of the greatest worries is settlement risk, which occurs when
a counterparty is unable or unwilling to provide either the pay-
ment or transfer of securities.
While a deal between two parties can easily be voided, thus
limiting impact of a problematic counterparty, the greater con-
cern is the systemic risk. As traders are simultaneously trading
with multiple parties, if one party fails to honor a transaction, it
can affect counterparties and could prevent them from having
the funds and/or securities to settle other trades.

Jake Sm|th, Head of Oommun|cat|ons at O|S, exp|a|ned that
F sett|ement r|sk |s a|so known as 'Herstatt R|sk` ". The
name is derived from the failure of a privately owned German
bank |n 1974. At the t|me, Bankhaus Herstatt had rece|ved
de||very of Deutsche marks from S counterparty banks, but
had been put into receivership before the corresponding dol-
lars were sent, due to the time zone difference. Smith ex-
p|a|ned that, wh||e th|s occurred near|y 40 years ago, due to
volumes growing substantially since that time, settlement risk
has grown signicantly.
To mitigate this risk, CLS was created. Currently, there are
over 60 members, which represent some of the largest nan-
cial institutions from around the world. CLS provides a central
sett|ement network for F transact|ons between |ts members
and their customers. To facilitate settlement, all members are
required to have a single multi-currency account with CLS,
supporting the 17 currencies that are settled by its system.
Settlement
After conducting a trade, members send transactional de-
tails to CLS Bank, including trade details, counterparties, and
settlement data. On the day of settlement, CLS Bank multi-
laterally nets all the instructions between the settlement mem-
bers, calculating each institutions pay-in obligations for the
day to ensure settlement of all their instructions on a payment-
versus-payment basis. As settlement completes, pay-out of
multi-laterally netted long balances will occur.
Example: GBP/USD = 1.50, EUR/USD = 1.25
Member 1: Buys 1,000,000 GBP/SD from Member 2
Member 2: Buys 1,000,000 ER/SD from Member 3
Member 3: Buys 1,000,000 GBP/SD from Member 1
Member 1: Owes 1.5M SD & 1M GBP, co||ects 1.5M SD
& 1M GBP
Member 2: Owes 1.25M SD & 1M GBP, co||ects 1M ER &
1.5 SD
Member 3: Owes 1.5M SD & 1M ER, co||ects 1.25M SD
& 1M GBP
If you have any questions or comments please contact us at report@forexmagnates.com114
Major News of the
Quarter
ICAP Announces Increase in Electronic Broking Volumes Up 3%
Year on Year
ln a 'Ta|e of Two Stor|es` |ead|ng |nterdea|er broker lOAP announced that da||y average vo|umes dur|ng December 2012
wh|ch were traded on the BrokerTec and EBS p|atforms exceeded the December 2011 f|gures by 3%. The average for
the month of December 2012 was $635.9 b||||on. However, lOAP`s EBS F trad|ng un|t saw year over year resu|ts drop
to $91.8 b||||on ADv, a mu|t|-year |ow at the venue.

Read the Entire Article
January
Detailed broker information for
the largest brokers in terms of
volume
FXCM
Saxo Bank
Alpari
IG Group
OANDA
Gain Capital
GFT
CMC
FxPro
GMO Click Securities
DMM.com
CyberAgent FX
Money Partners
Name: OyberAgent F
Status: Pr|vate
Year Established: 2003
Shareholders and Funding: Yahoo Japan Corporation
Investments and M&As: Acqu|red by Yahoo Japan for $254 m||||on December 2012}
President, Representative Director: Masahito Ito
Capital: 490 m||||on
Reported Net Prot in 2013 (4/2012-3/2013): N/A
Trading volume (OTC): 233,984 4 months average, Nov/2012-Feb/2013}
Number of Accounts (OTC+Click365): 151,075 4 months average, Nov/2012-Feb/2013}
Total Deposit (OTC+Click365): 67,818 m||||on Feb/2013}
Regulation: Japan FSA
News: Transfer a|| of the shares of OyberAgent F, lnc. has been comp|eted to Yahoo lnc. dated on January/31/2013.
Month Trading
volume (OTC)
(in million yen)
Customer
accounts
(OTC)
Customer
accounts
(Click365)
Deposited
Amount (OTC)
(in million yen)
Deposited
Amount (Click365)
(in million yen)
Jan-12 85,173 173,881 72,231 45,611 5,738
Feb-12 120,192 178,185 76,719 46,622 5,358
Mar-12 150,816 181,969 80,625 47,772 5,286
Apr-12 116,763 184,165 82,905 50,514 5,283
May-12 115,075 186,454 82,905 52,343 5,417
Jun-12 147,657 188,455 87,581 53,446 5,406
Jul-12 109,199 190,329 89,575 55,168 5,446
Aug-12 106,872 191,839 91,156 56,253 5,454
Sep-12 107,689 193,556 92,950 56,730 5,445
Oct-12 127,134 195,794 95,240 57,930 5,494
Nov-12 151,400 197,615 97,129 57,990 5,466
Dec-12 154,796 199,258 98,866 57,505 5,244
Jan-13 303,714 202,097 101,780 59,724 5,102
Feb-13 326,026 206,059 105,817 62,825 4,993
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B|nary Opt|on P|atform Prov|ders
VPS Prov|ders
Ca|endar/data/market commentary
Mob||e P|atform Prov|ders
Charts/Patterns
P|atforms
Auto, Copy-Trade and Soc|a|
Regu|atory Agenc|es
Regu|at|on Lawyers
Payment so|ut|ons
mt4v|deos+educat|on
Outsourced Dea|ers
Sa|es Opt|m|zat|on Prov|ders/Ca|| Centers Creat|on
Forex Spec|a||zed Market|ng Agenc|es
Advert|s|ng channe|s
Forex Industry Biggest
M&As and Investments
Broker Type Amount Value
OANDA Investment
Investment
Acquisition
$100m
$17m
|egg Mason, Oascade lnvestment, T. Rowe Pr|ce
Index Ventures
Japanese broker MyGaika
09/2007
09/2005
08/2011
Gain Capital Investment
Acquisition
Acquisition
lPO
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
$8m+15%
$9.7m
$12m
$279m
$32m
$55m
$12m
$175 million invested in the company in total
Fortune Capital Japan its white label
Acquisition of MG Financials retail Forex business
lPO NYSE:GOAP
Acquisition of retail Forex business of CMS Forex
Acqu|red the c||ent base of dbF wh|ch ex|ted S
Acqu|red 100% of Open E Ory from Opt|onspress
Acquired US clients base of GFT
Acqu|red S c||ents base of F So|ut|ons
-2010
03/2009
05/2010
12/2010
01/2011
05/2011
06/2012
12/2012
02/2013
City Index Acquisition
Acquisition $100+m
57.9m
$300m
lF Markets acqu|s|t|on, |nc|ud|ng F|nspreads
F So|ut|on acqu|s|t|on |n 20%/100% share swap |nc|ud|ng
Franc|sco Partners stake buyout
08/2006
02/2008
lnterbank F Investment $40m Investment from Spectrum Equity Investors
Acquired by TradeStation for $17m net of cash
07/2007
11/2011
IG Group Acquisition
Acquisition
Acquisition
$6m
$207m $236.6m
Nadex HedgeStreet}
87.5% stake acqu|s|t|on FOn||ne Japan
ldea|OFD w|th 2000 traders and $450k |ncome
2007
09/2008
09/2010
FOM Equity
Acquisition
Acquisition $3m
Refco sold a 35% stake to Lehman and Long Ridge
Acqu|red Hotspot`s S reta|| bus|ness
Invested/Acquired part of Avalon software house
2007
01/2009
04/2009

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