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FXCM UK reaches GBP14m settlement with FCA for trade execution practices

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Forex Capital Markets and FXCM Securities (together FXCM UK) have agreed a GBP14m settlement with the Financial Conduct Authority (FCA) over trade execution practices between 2006 and 2010.

The settlement addresses trade execution practices concerning the handling of price improvements on FXCM UK’s offsetting orders from August 2006 to December 2010.
 
Under the terms of the settlement, which addresses trade execution practices concerning the handling of price improvements on FXCM UK’s offsetting orders from August 2006 to December 2010, FXCM UK has agreed to pay fines totalling GBP4m to the FCA and to provide approximately USD10m in restitution to the affected clients.
 
FXCM recorded a reserve USD15m in the third quarter of 2013 for this matter and will record an additional USD1.9m in the fourth quarter to reflect the terms of the settlement and related expenses. All clients receiving restitution will be notified within 60 days.
 
Of the approximately USD10m being credited under this settlement, the impact on individual traders was typically very limited and averaged USD3.70.
 
“This settlement is a significant step in our efforts to put this legacy trade execution issue behind us,” says Brendan Callan, FXCM UK’s chief executive officer. “We are also pleased with the FCA’s 12 Feb 2014 MarketWatch Newsletter article on trade execution standards and we hope that it helps improve execution practices across the industry. We believe it is imperative that all firms operating in the retail FX and CFD market uphold the same high standards and execution policies which we fully implemented back in 2010. A recent analysis of trades over a six month period demonstrates how our customers have benefitted from our enhanced trading execution policy.”

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