Viral reports of IC Markets having a backlog of over 400 client withdrawals have pervaded Chinese cyberspace and FX industry forums as well as entered the domain of rival companies from the West with presence in China. We take a look at what is effectively a storm in a teacup. Literally.
Australian retail FX brokerage IC Markets has today become the subject of substantial rumors within the Chinese FX fraternity, largely centered around a perceived issue with withdrawals.
This week, following the Chinese national holidays which began on October 1 and finished on October 8, speculation has begun to emerge that there are difficulties being experienced by traders in China wishing to make withdrawals from IC Markets.
FinanceFeeds has received several reports from within mainland China, from a series of brokerages as well as large IBs, highlighting concern over what appears to be a backlog in withdrawal processing by IC Markets.
The rumor appears to have stemmed from one of IC Markets’ large introducing brokers (IBs) in China, and, as is often the case, has made its way across brokerages and into retail FX forums, as this is how commercial grievances are often handled in China.
One particular representative of a large, Western brokerage with several offices in China approached FinanceFeeds today with the bold claim “We understand IC Markets to be having troubles with Chinese IBs” and considered this to be ‘news.’
Within a few hours of such rumors having circulated, FX110.com, which is a Chinese retail portal that calls itself the ‘Forex Police’ had published a notification that “IC Markets clients are able to withdraw but support team responses are very slow.”
“Currently, what we understand is that the head of the firm’s Chinese office has moved to Europe, and the Chinese branch will move to Hong Kong, and client support will be moved to IC Markets in Australia” is the supposition that has been published on Chinese media.
FinanceFeeds contacted IC Markets with regard to this matter, and explained that it is understood among many Chinese IBs that there is a backlog of over 100 withdrawals, which are not being executed in a timely manner.
IC Markets response was “Unfortunately we cannot control the rumors. They may have stemmed from our competitors, and there is no backlog of withdrawals, only client emails due to the holidays.”
Whether this is the case or not, there is certainly some credibility in IC Markets’ response, because the allegation that the firm is ‘not paying its largest IB’ did indeed emanate from another brokerage, itself not in the best condition, which relies on China for its survival.
With regard to the assertion on FX110.com that IC Markets is restructuring, IC Markets categorically maintains that this is not the case at all, and that its operations will remain as they are currently, with full support in mainland China, and that the firm’s senior executives have not moved from the company.
Quite simply, this reaction has been brought about by media speculation in China, and by customers who have experienced a longer customer service response time than is usually the case, however, given the holiday in China and the sheer volume of business in China.
Some speculators have publicly broadcast that there are up to 400 customers waiting for withdrawals, which is absolutely demonstrative of the escalation of dramatic guesswork that is currently pervading the airwaves from Shanghai to Shenzhen.
IC Markets confirmed to FinanceFeeds today that there are no delays and they are covering the withdrawals, albeit slowly, citing a shortage of staff as a reason for this following the week-long holiday in China.
“There are no delays with withdrawals and all trading accounts are operating as normal” said the IC Markets executive.
Whilst not quantifying the exact number of customers affected, FinanceFeeds explained that there is speculation that up to 400 customers have experienced slow withdrawals, to which IC Markets replied “yes indeed, we are processing these normally.”
“We are just trying to reassure clients that everything is fine. As you can see, you got straight through to us. If the withdrawal request is received before 01:00 GMT (12:00 AEST) it will be processed on the day of receipt. If your withdrawal request is received after this time it will be processed on the following business day” – IC Markets
Concluding, IC Markets explained “Please don’t beleive everything you read online. Everything is fine, it is business as usual for us, and all clients who have contacted us will be replied to as soon as possible.”
Insidious or benign, the media is a very quick platform within China to which IBs and clients take in order to flex some degree of power and advance their cause.
Whilst this appears to be very much a storm in a teacup, ASIC, the regulatory authority under which IC Markets operates, may stipulate specific withdrawal timescales, however when customers outside the Australian jurisdiction are concerned, this is not enforceable.
Sour grapes from competitors can often fan the flames of the media-inspired rumor mill. Mind how you go…..