Recent financial market volatility has done little to boost deposits among U.S. retail traders, which fell for the second straight month. The latest August data shows it is down 5% from its 2024 high, the worst result since the start of the year.
US foreign exchange deposits drop by another $15 million
According to the latest data from the Commodity Futures Trading Commission (CFTC) for August 2024, total foreign exchange deposits in the United States totaled $530.1 million, down 2.8% from the $545.5 million reported the previous month. In nominal terms, the decline was more than $15 million, the largest in 2024.
U.S. foreign exchange deposits have fallen for the second straight month after hitting a local high in June, and are now at their lowest level since January 2024, when they were just under $530 million.
This data is inconsistent with the same month’s Cboe report, which showed foreign exchange market activity remained strong, with volume increasing to $1.1 trillion.
Only Charles Schwab and Interactive Brokers reported growth.
Looking at the distribution of volume declines for individual trading companies, only Charles Schwab and Interactive Brokers reported positive changes. Charles Schwab recorded a 2.2% increase, while Interactive Brokers recorded a hefty 12.5% increase, which equated to $3.7 million.
IG US, on the other hand, posted a steep decline of nearly 15%, dropping $9 million to $33.7 million. OANDA also noted significant nominal losses of approximately $8.3 million. However, percentage-wise it was significantly smaller than IG US at 4.5%.
Financial Reporting Requirements for US Forex Brokers
The CFTC plays an important role in ensuring the financial health and transparency of foreign exchange brokers operating in the United States. Retail foreign exchange dealers (RFEDs) and futures trading companies (FCMs) are required to submit detailed monthly financial statements to regulatory bodies.
These reports should include key financial metrics such as:
Adjusted Net Capital Customer Assets Retail Foreign Exchange Liabilities
Retail foreign exchange liability represents the total assets held by FCM or RFED on behalf of its customers, with realized gains or losses recorded. This requirement applies to all 62 registered RFEDs and FCMs in the United States, including well-known companies such as Charles Schwab, Gain Capital, IG, Interactive Brokers, OANDA, and Trading.com. These companies must publicly disclose their financial commitments to promote transparency across the industry.
Recent observations indicate that FCM is investing heavily in cutting-edge front-end technology. This strategic move aims to improve operational efficiency and strengthen competitiveness in the dynamic derivatives market.
