EURCHF News by Allie Longford on 19:23 March 17, 2015 EST
Just to recap, on January the 15th the Swiss national Bank decided, unexpectedly and contrary to previous statements, to stop protecting the Swiss Franc from further appreciation against its main counterparts. The bank had been preventing the Swiss currency from piercing the 120 mark on the EURCHF cross for more than four years by selling the Franc and buying other currencies essentially, and in practical terms, pegging it to the Euro.
The news of the SNB abruptly ending its market intervention led to a huge spike of the Swiss franc against all major currencies in a very short period of time and some unintended consequences arose from that moment with some brokerage firms going under and others getting into trouble either financially or with their clients.
We have already reported on British forex and CFD broker CMC markets strange operational circumstances during and after the event with clients joining forces and taking actions against the London based firm managed by Peter Cruddas and partially owned by Goldman Sachs. We are in touch with some of those clients and look forward to reporting as their cases progress through the financial Ombudsman in the UK and their equivalents in other countries. Meanwhile, CMC Markets have kept quiet after our request for their views on this matter.
Now we learn from Reuters that another forex broker, IG, has been having 'some conversations' with the Financial Conduct Authority, which is the body that regulates the industry in Britain -already busy dealing with the LIBOR manipulation scandal-, with regards to their handling of the abrupt move on the Swiss currency crosses on that day that have led some of its client into serious financial hardship.
We will continue monitoring and reporting on this matter hoping for more transparency and responsibility from Forex brokers and for the benefit of the reputation of the whole industry for financial authorities to clamp down on any abuse that may have been occurring.