e-FX Industry Report : Retail FX Market: Growth, Consolidation, and Evolution

First Published in e-Forex Magazine January 2010

Sang Lee

Managing partner of the Aite Group

With the passing of the Commodity Futures Modernization Act (CFMA) in December 2000, the Commodities and Futures Trade Commission (CFTC) became officially responsible for regulating the retail FX market, thereby legitimizing the existence of the burgeoning retail market. Today, the retail FX market is booming with strong adoption across all major financial centers.

While the retail FX market is focused on providing products and services that target retail clients, the definition of what a retail client entails is not so straight forward. In fact, most retail FX firms would also include small hedge funds and CTAs among their clients. The typical profile of a true retail client could vary widely from those high-net-worth individuals with more than US$1 million in average account size to small-time retail clients with a mere US$250 in account size.

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