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E*Trade Takes The IB Route To FX. Why Not A Full RFED?

|Includes:AMTD, BGCP, C, E*TRADE Financial Corporation (ETFC), FX, FXCM, GCAP, KCG, SCHW, STT

Launches E*Trade FX as an IB of FXCM.

ETrade logoFXCM logoOnline stockbroker E*Trade announced today that they have joined a number of their online brokerage brethren in getting into the retail FX business, with the launch of E*Trade FX as a White Label of FXCM's Trade Station platform.

However, as pointed out by our friends at CMAP on their corporate blog, E*Trade FX is launching as an Introducing Broker ("IB") rather than a full Retail Foreign Exchange Dealer ("RFED"). What that means is that FXCM, and not E*Trade, will hold all the FX accounts and corresponding client funds, and FXCM will act as the counterparty to FX trades with clients, not E*Trade.

Why is E*Trade becoming a IB, and not a full RFED? For more details see LeapRate's Forex Industry News at leaprate.com.

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Stocks: ETFC, FXCM, SCHW, AMTD, GCAP, FX, KCG, BGCP, STT, C