IG overtakes Schwab as 3rd largest retail FX broker in US

abdelaziz Fathi

The Commodity Futures Trading Commission (CFTC) has released its monthly report for May 2023, providing insights into the U.S. retail forex market. The report covers data for registered Retail Foreign Exchange Dealers (RFEDs) and broker-dealers holding retail forex deposits in the United States.

In May, the total assets of U.S. retail forex traders experienced mild growth, reflecting the overall static performance seen throughout 2023. Despite operating within a highly regulated environment, forex products continue to face challenges in gaining traction in the United States.

However, there is anticipation that lighter regulations could potentially revive interest among foreign brokers in the U.S. market or improve the outlook for the struggling retail industry, which has faced difficulties under the provisions of the Dodd-Frank legislation.

Specifically, retail forex deposits in the U.S. demonstrated positive momentum in May. The total FX funds held at registered brokers reached $528 million, a $14 million increase compared to the previous month’s $514 million.

According to the CFTC’s dataset, four FX firms experienced growth in Retail Forex Obligations: IG US, GAIN Capital, Interactive Brokers (IBKR), and OANDA. Among them, IG US reported the strongest increase in client deposition, rising to $69.8 million by the end of May 2023, up 20% month-over-month.

The US business of Europe’s largest spread better overtook Charles Schwab as the third largest holder of retail FX funds — something that only happened a number of times with Interactive Brokers as both companies duke it out for dominance.

Retail customer deposits at OANDA Corporation and GAIN Capital experienced only marginal growth, while Interactive Brokers saw a rise of 7 percent, reaching $33 million in May 2023. In contrast, the newest player in the U.S. FX industry, Trading.com Markets, witnessed a 16% increase in retail obligation, crossing above the $1 million mark for the first time.

The US arm of forex brand XM provides retail foreign exchange services to US traders amid a tough regulatory environment that has squeezed other providers out of that market. Trading.com first applied for a forex broker license in the US back in January 2019.

Additional findings from the CFTC report indicate that Charles Schwab’s client funds were down $1.25 million, a 2% decrease compared to the previous month.

In terms of market share, GAIN Capital maintained its leadership position with a 37% share, followed by OANDA with a 30% market share. IG US and Charles Schwab held 13% and 12% respectively.

The provided chart details all FCMs that held Retail Forex Obligations in May 2023, along with a comparison to their April 2023 counterparts, offering a comprehensive overview of the disparities observed.

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