Peter Furrer, President at GFX Group SA,  has
been the third top executive of the selected 20 FX Brokerage firms to
answer the questionnaire we sent yesterday morning regarding new NFA
requirements and their potential impact on the FX industry.

I want to thank Peter for attending my request and wish him and his company GFX Group SA all the best.

Francesc

Dear Francesc,

Thank you for the privilege to be part of your survey.

First I would like to confirm, that I concur with the opinion that some of the changes in progress will affect not only the retail FX industry but more importantly the customers view on this business. Security and safety of funds is the most important concern of any investor and if the retail FX industry is capable of confirming that, I am certain, we will see an increase in business. Unfortunately this primarily means investments & costs for us, as every new bureaucratic measure has its price tag.

I tried to be as short and precise as possible – my comments below your respective question.

Please do not hesitate to contact me in case you might have any further question.

With kind regards

Peter Furrer
GFX Group SA

 Questionnaire:

1 - What is your opinion on the recent NFA regulatory changes? How do you view the implementation of these new measures for FDMs?
GFX Group SA is currently not affected by these changes.

2 - The new proposal also calls for the use of proper and uniform accounting methods and tightens internal controls. Do you think this measure could affect your company’s business in some way?
Yes, in 2 ways – 1st from an expenditure point of view. Operational & controlling costs will increase substantially in the industry and 2nd from a client confidence point of view. Transparency & tighter controls provide the customers with a higher level of security comfort.

3 - Do you consider these measures could be a breath of fresh air that could result in more investors joining the FX Market?
Yes, see above.

4 - Switzerland has recently started a similar process, what is your opinion about it?
Highly supportive. General Financial Market reputation is at stake without some control & supervision. Regulators focus should be on security of investor funds without an extravagant and expensive bureaucratic process.

5 - Would your company be on the bid side if some firms were not meeting new requirements? What is your company’s policy on acquisitions of smaller firms?
To be reviewed on a case-by-case basis – but reluctant to look at companies that could not meet the new requirements. Interest depends on possible market perception and - penetration.

6- How do you see the M&A market in the Forex industry? Do you expect important corporative movements in the next months?
Not in the next few months but - especially on a technical / operational basis - within the next year or two. The regulatory requirements will force some FX traders to join forces with competitors to get a grip on costs.

7 - For many, the very business model of Forex brokerage firms that needs to be decided is whether or not such brokerage houses can take opposite trading positions to those held by their customers, i.e., trading ‘against them’, which contradicts traders’ well-being. What is your company position on this? How do you hedge your customers’ trades?
The current business model of brokerage houses taking opposite trading positions is a question of taking a calculated risk and having enough capital in order to absorb a potential trading loss. Prudent risk management is the essence. We are hedging in the market.

8 - Would you like to add something else?