IG Group on Friday officially announced the launch of its new US subsidiary IG US. The London-headquartered broker is the first new entrant into the market since 2009. At the time, prohibitively high capital requirements gradually forced IG itself and many other firms out of the market.
IG US will focus on providing its clients with foreign exchange trading. This isn’t the first subsidiary of IG Group in the US. The company also owns the CFTC-regulated Nadex binary options exchange.
Commenting on the company’s forex foray into the US, the CEO of IG Group, June Felix said: “We see this initiative as a significant growth opportunity and we’re excited about IG’s future in the US.”
The major competitors of IG Group’s new subsidiary in the US will be GAIN Capital and OANDA. The firms have been the only two remaining brokerage companies focused on providing forex trading to US customers.
IG Group is planning to gain market share with an aggressive pricing strategy. The company stated in its official announcement that US clients would gain access to over 80 currency pairs.
The firm also explicitly stated that it would offer lower spreads when compared to the top two US forex brokers. IG US is not planning on charging its clients any commissions, signaling that the brokerage is most likely planning to make the market itself.
The launch of the new subsidiary of IG Group in the US officially started yesterday with select clients getting access to the company’s trading platform. Forex trading with IG US will be made available to the whole of the US market in early February.
IG Group chose Rupert Osbourne to lead the company’s expansion into the US. “The US forex market has been fairly stagnant and underserved,” the IG US CEO said.
Osbourne also emphasized that the company is delivering to the market a newly designed platform which will offer to US customers new user experience.
IG US is regulated as a Retail Foreign Exchange Dealer (RFED) and is registered with the Commodity Futures Trading Commission (CFTC). The company is also a Forex Dealer Member (FDM) of the National Futures Association (NFA).
After purchasing DailyFX from FXCM for $40 million in September 2016, IG Group gained a significant asset to onboard US clients. At the time the firm’s move was questioned by analysts and was largely viewed as a misstep after EU and UK regulators committed to aggressive leverage restrictions two months later.
After holding onto the asset for over two years, the company has the opportunity to capitalize on its significant initial investment. Aside from GAIN Capital and OANDA who are focused on FX, the US forex market is also serviced by two discount brokerages: Interactive Brokers and TD Ameritrade.