Industry figures indicate that there is an ongoing fight among brokers attempting to survive what is fast shaping up to be a Forex bubble. In the Eurozone, there is an over-saturation of brokers, partially caused by the ease with which it's possible to get regulated in areas like Cyprus, and in the U.S. because of the NFA's regulation (some might say the over-regulation) of the trading environment there is a strong need for brokers to seek out creative and alternative solutions to increase their customer base. Some brokers have relied on new technologies or products to draw in new customers, while other brokers have been forced to streamline their operations or reduce their offerings to improve their bottom line. Many believe that the answer to brokers' success will lie not in expanding their product offerings and services, but by expanding their geographic borders. What's left to consider outside of the Eurozone and the U.S. is South America, Asia and Africa, all of which represent great opportunities for Forex brokers, but clearly they will not come easy.
South America is the latest market to be targeted by Forex brokers, with Saxo Bank announcing last month that it had acquired NVN Securities of Uruguay. FXCM is currently the only other broker in South America, with an affiliate office located in Chile. Onerous regulatory "?peculiarities" appear to be a significant hindrance for broker entry into the market.
In Asia, Forex brokers have seen significant growth in China, India, Malaysia and Singapore. Singapore, especially, has a liberal regulatory and taxation regime and the government has been going head to head with Hong Kong and Australia for financial control of the area and though they have a small population relative to powerhouses China and India, they have been attracting a good deal of brokers' attention. Still in Asia, the regulatory body, ASIC, has also tightened the reigns on Forex brokers and potential brokers, making the process more expensive while protecting the assets of Asian traders.
With a steadily-growing middle class, Africa is now on the radar for many of the world's leading Forex brokers. The potential African market has already been taken into consideration by several brokers including Markets.com, DeltaStock, Saxo Bank and IG Markets which have or will be opening up offices this year in South Africa. That being said, geopolitical turmoil and a lack of good infrastructure will present significant challenges to brokers looking to tap this new market. But of course the largest and most developed economy in Africa, namely South Africa, looks to offer tremendous opportunities as a business-friendly environment. Economic data suggests that despite occasional labor-related missteps, the South African economy is likely to continue to thrive. And with the ability to get regulated by South Africa's Financial Services Board (FSB).
Forex trading by nature has always been an international industry, it's certainly erupted in some countries and been largely ignored in others. It will be wonderful to see more people trading Forex, as long as they do so intelligently and with the proper Forex education.