Established: 2010
Country of Origin: UK
Regulated: Yes (FCA in UK)
Accepts US Traders: No
Business Model: MTF (Multilaterial Trading Facility, "Exchange")
Minimum Trade Size: 1 Micro Lot (1000 units)
Trading Software Platforms: LMAX Web Trader, MetaTrader 4 (MT4), MultiCharts, API access
Commissions/Spread Cost: 2.50 per 100,000; or 2.80 per 100,000 for MT4
Best Suited For: Non-American traders of all levels
Official website: lmax.com
LMAX Exchange was launched in 2010 as a "Multilateral Trading Facility" (MTF) -- branded as a neutral order matching system for Forex traders using Exchange in their name (but, due to some regulatory oddity, they're not allowed to actually call themselves an exchange outside the context of their name.)
LMAX Exchange was founded by the company behind BetFair, a major UK firm which operates as a centralized exchange for sports betting (where it seems the word exchange can actually be used more freely.) And like their sports betting exchange, LMAX Exchange was initially known to suffer from issues of low liquidity compared to competitors. After all, established ECN brokers had a lot more participants already using them.
Still, with some big names participating on the MTF as market makers, and with the authorization of the relatively strict regulators at the FCA (UK), LMAX Exchange is definitely a player in this industry to follow. Deposits are covered by the UK's FSCS, like most of their competitors under the same regulatory regime.
In our experience, the LMAX Exchange servers are definitely lightning fast with trade executions and prices are kept very close to the overall interbank FX market. Spreads are extremely tight during market hours. They've kept their promise of No Requotes so far, and according to representatives of LMAX, the market making banks aren't given Last Look on orders so it's definitely a step in leveling the online FX playing field.
Unfortunately, due to regulatory changes in North America, it looks like they've ceased to accept customers from both the US and Canada, where bucket shops continue to dominate and segregated customer funds still manage to escape regulators' requirements.
Overall, based on our international staff contributor's experience, LMAX Exchange is a potentially revolutionary approach to the Spot Forex industry suitable for traders of all levels... if you live in a jurisdiction that they are allowed to serve.
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