forex Demo account

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FX Week The global business of foreign exchange
NEW YORK & COPENHAGEN – Citi and
Goldman Sachs are breaking into the
retail foreign exchange market by launching
an online FX margin trading platform
and buying a 10% stake in an online
retail CFD company, respectively.
The banks join Deutsche Bank, ABN
Amro and UBS, all of which have entered
the market with platforms. The German
dealer has partnered with online broker
FXCM, and ABN and UBS have teamed
up with Oanda. According to Londonbased
client strategy firm, ClientKnowledge,
the retail FX market is sized at
more than $50 billion a day.
Citi’s new platform, CitiFX Pro, is a
version of Saxo Trader, Saxo Bank’s
online trading platform. However, a differentiator
between the two platforms is
that advice and trading recommendations
will not be given on CitiFX Pro, said Kim
Fournais, co-chief executive of Saxo
Bank in Copenhagen. The platform will
also be customised to fit Citi’s preferences
for design and functionality.
"The Citi and Saxo Bank deal is quite a
coup, as the partnership combines a great
customer franchise with a well-regarded
technology solution," said one Londonbased
head of FX at a global bank. "While
it comes a year behind other banks in the
market, it is certainly not too late."
However, commercial banks entering
retail FX risk damaging
their reputation
with longstanding
account
holders.
But Sanjay
Madgavkar, global
head of FX margin
trading at Citi in
New York, said Citi
plans to evaluate the
level of trading experience new clients
have before allowing them onto the platform.
"We also comprehensively prescreen
each retail trader seeking to use
the platform according to financial condition,
including liquid net worth."
Retail investors seeking to trade on the
platform will need a minimum account
deposit of $10,000 or its equivalent in
EUR, GBP or JPY. Citi will act as the primary
liquidity provider on CitiFX Pro,
but will also source liquidity from Saxo’s
pool of liquidity providers.
Madgavkar said Citi will treat all client
pricing and flows in a similar manner to
its institutional pricing and flows. "Our
pricing and flow management practices
will meet industry best-practices in this
regard," he said.
Questions exist as to whether the partnership
with Citi will hinder other banks
from securing white-label deals with Saxo
Bank. However, Fournais said Saxo will
not be prevented from doing deals with
other players.
CitiFX Pro is being launched in the US
in the next few weeks. The platform will
be rolled out globally in 2008.
Meanwhile, agreement by banking rival
Goldman Sachs to acquire a 10% stake in
CMC Markets similarly signals a push to
capitalise on burgeoning opportunities
in retail FX.
CMC Markets is fast-growing participant
in online trading and currently
clocks an annual growth of 40%. Its flagship
product is retail FX real-time trading
platform Marketmaker. Launched in
1996, the platform is available for whitelabel
partnerships with banks seeking to
break into the retail trading market. It is
not known whether Goldman plans to
white-label Marketmaker. But CMC
Markets executive chairman Peter Cruddas
said the companies will co-ordinate
their operations in some capacity. "There
are exciting synergies for the business
that would be difficult to match from any
other investor, and by bringing together
the liquidity and technological expertise
of both parties we will be able to deliver
real benefits to our customers," he said.
The deal is subject to regulatory
approvals and other pre-completion
conditions. FX Susanna Robinson
Citi and Goldman break into retail FX
fxweek.com
Kim Fournais, Saxo