Mille Lees Mille Lees, Monday 20th May 2019, 9:52 AM GMT+0000
Germany FX

Germany FX Industry being changed by ESMA

Germany FX has the largest economy in the European Union, and it also has the largest Forex Exchange Market in Europe. However, over the last twelve months, there have been changes that have caused trading in Germany to be impacted.

Arguably the most important country for the European Union, it’s surprising to see the European Securities and Exchange Commission impose regulation that would cause for CFD Contracts and FX Trading volumes to be impacted in Germany. However, even with the new rules put into effect during the end of 2018, the Forex Market in Germany saw an increase of 23% in trading accounts. There is now a total of 76,000 active traders active in Germany.

Retail Investment Growth in Germany

This marks the most significant growth for Germany in several years since FX, CFD & Forex Markets were first opened. The number would be far more substantial if the European Securities and Exchange Commission didn’t continually change their regulation, affecting brokers and traders in the process. It’s estimated that in the next government-issued report released by Germany, that we will see a significant rise in overall trading assets.

Currently, the top five brokerage firms in the German Forex & CFD market space include Flatex, CMC Markets, WH Self Invest and Plus500. All five of these brokers saw a small percentage decrease in trading and investing. The most popular currencies that were traded included the Euro, US Dollar and Great British Pound. This isn’t surprising considering that the London Stock Exchange is the closest financial metropolis to Germany today. Traders would want to invest or trade in their currencies, allowing them to earn a profit on the exchange.

CMC Market Still Holds Hope

The largest broker in Germany, CMC Markets, believes that there is hope for the market conditions in Germany to remain healthy. The brokerage refused to comment on their losses in 2018, though industry analysts suspect that the funds lost to the ESMA regulation change would’ve been minimal.

CMC Markets made a statement through their website, stating: “Overall performance in FY 2019 has been impacted by reduced client trading activity following the implementation of the ESMA intervention measures on 1 August 2018, compounded by challenging market conditions during much of Q4,” the statement reads. As a result, CMC expects to report CFD and spread-bet revenue of c. £110 million for FY 2019, 37% lower than the prior year, and net operating income of c. £131 million.”

Hope isn’t lost for the broker though, as even though the company felt the effects of the regulation changes enacted by the ESMA, new trader accounts remained at the same highs that they have been for months now.

Mille Lees

Author: Mille Lees

Millie has been with whichbroker.com since the start. She has a passion writing financial news after an internship at Bloomberg London. Millie's background in journalism and politics means she has an eye for a good story. Millie graduated from LSE and has a masters from Durham University England. Mille Lees can be contacted at [email protected],

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