Category: News

Various forex brokers reacted differently to the Swiss National Bank’s announcement that it had removed a 3 -year old cap against the Euro. The announcement, which sent the markets into a fray and was dupped #Francogeddon on the social media, caused incredible volatility and extreme ‘illiquidity’ in the markets.

Some brokers, such as the UK arm of Alpari, announced that they were folding operations due to the massive losses their customers incurred.  In many cases, the losses exceeded the investment/equity of the customers, forcing the forex brokerage firms to carry most of the losses.

Global Brokers NZ, another forex brokerage firm who folded operations in the wake of Francogeddon, said that many of its customers suffered loses that were more than their accounts’ equity, forcing the brokerage firm to bear the blunt of the losses.

The two forex brokerage firms have ascertained clients’ whose accounts were not affected by the Swiss Franc that they will get all their money back.

Amidst the Francogeddon Fray, a Glimmer of Hope

Other forex brokers are still trying to analyze the effect the Swiss Bank’s announcement had on their balance sheets, and there is a likelihood we will be hearing news in the tune of UK’s Alpari in the course of next week.

While the removal of the Franc-Euro cap was overwhelming to many forex brokers, some have been able to handle the announcement quite amazingly. A case in example is Oanda Brokerage Firm, which announced that they didn’t issue requotes on the CHF and that they had cleared all negative balances that customers who were on the wrong side of the trade had incurred.

Oanda’s announcement, which was carried in an email dispatch to clients, however, failed to verify whether traders who had bought CHF crosses would be paid.

“In the wake of this unprecedented market event, OANDA demonstrated its ongoing commitment to doing right by its clients. Despite suffering losses and vanishing liquidity in the institutional hedging market, OANDA remained true to its 14-year legacy of transparency, integrity and fairness to our clients. OANDA did not re-quote or amend any CHF cross client trades. We even took the further step of forgiving all negative client balances that were caused when clients could not close out their positions fast enough (where permitted by regulations),” the email read in part.

IronFx and HotFx also issued statements to the same effect.

A statement by IronFx read:

Iron Global Limited was not affected by these events due to our strong risk management systems and procedures and we continue complying well with our capital regulatory requirements under all regulatory bodies we have licenses. We would therefore like to inform our clients that we continue conducting our business as usual.

Hot Forex issued a similar statement:

We would like to reassure you that HotForex is operating as normal, and was not affected in any material way.Our strict Risk Management procedures minimized the impact of this event.

Furthermore, we have stayed true to our motto of Honesty, Openness and Transparency. As testament to our commitment to fairness, all negative account balances have been reset to zero and any clients that bought CHF have been paid in full.



A few hours after the Swiss National Bank announced the removal of the cap against the Euro, Alpari UK, one of the forex brokers that we previously featured in our forex brokers reviews has filed for insolvency.

The sudden move by the Swiss Bank to remove a 3-year old cap against the Euro saw volatility in the forex markets rise to an incredible rate while liquidity remained very little. Because of the extremely low liquidity caused by the Swiss Bank announcement, a lot of forex brokers could not close client positions.

A lot of forex traders sustained heavy losses, which in many cases were way over their account Equities, forcing the brokers to carry the liability. In a statement released on their website, the UK broker announced that it was not in a position to carry customer losses and therefore was filing for insolvency.

Alpari UK  becomes the first broker to file for insolvency as other brokers find avenues to get out of the mess. FXCM, another broker who we have had the honor of featuring in our forex broker reviews, has had to borrow money to sustain its operations in addition to cancelling its listing on the New York Stock Exchange. Meanwhile, IronFx, HotForex, among other forex brokers have sent out statements declaring that they are still in operation, and the Swiss Bank announcement had little impacts on their financial statuses.