Stock Exchanges: Retail foreign exchange brokers

Retail foreign exchange brokers

There are two types of retail brokers offering the opportunity for speculative trading: retail foreign exchange brokers and market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated by the CFTCandNFAmight be subject to foreign exchange scams.^[8]^[9] At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that all is as it is presented.

Non-bank Foreign Exchange Companies

Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but currency exchange with payments. I.e., there is usually a physical delivery of currency to a bank account.

It is estimated that in the UK, 14% of currency transfers/payments^[10] are made via Foreign Exchange Companies.^[11] These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.

Major stock exchanges

Twenty Major Stock Exchanges In The World: Market Capitalization & Year-to-date Total Turnover at the end of May 2009

Region	Stock Exchange	Market Value (millions USD)	Total Share Turnover (millions USD)
Africa	Johannesburg Securities Exchange	605,040.2	117,424.7
Americas	NASDAQ	2,773,684.3	12,256,704.3
Americas	São Paulo Stock Exchange	920,263.9	191,926.1
Americas	Toronto Stock Exchange	1,347,674.0	490,912.4
Americas	New York Stock Exchange	9,574,066.6	7,986,835.8
Asia-Pacific	Australian Securities Exchange	839,062.7	273,205.9
Asia-Pacific	Bombay Stock Exchange	1,032,589.6	83,906.6
Asia-Pacific	Hong Kong Stock Exchange	1,773,002.2	519,465.7
Asia-Pacific	Korea Exchange	640,357.6	618,607.8
Asia-Pacific	National Stock Exchange of India	968,815.1	242,641.7
Asia-Pacific	Shanghai Stock Exchange	2,069,937.1	1,685,862.2
Asia-Pacific	Shenzhen Stock Exchange	563,103.3	880,744.6
Asia-Pacific	Tokyo Stock Exchange	3,102,492.9	1,561,888.8
Europe	Euronext	2,262,751.6	742,885.6
Europe	Frankfurt Stock Exchange (Deutsche Börse)	1,132,126.2	1,101,064.6
Europe	London Stock Exchange	2,204,320.0	1,483,263.3
Europe	Madrid Stock Exchange (Bolsas y Mercados Españoles)	1,084,606.4	591,217.3
Europe	Milan Stock Exchange (Borsa Italiana)	554,613.9	341,421.1
Europe	Nordic Stock Exchange Group OMX¹	664,465.8	319,398.1
Europe	Swiss Exchange	854,369.0	272,201.5

^Note 1 includes the Copenhagen, Helsinki, Iceland, Stockholm, Tallinn, Riga and Vilnius Stock Exchanges

Sources: World Federation of Exchanges - Statistics/Monthly
Remarks: There are 2 pending major mergers: NASDAQ with OMX; and London Stock Exchange with Milan Stock Exchange