Newly launched firm targets experienced retail forex investors with competitive pricing for “mid-level” institutional investors.

Accessing the sort of pricing levels that institutional investors enjoy is difficult for many retail investors, but a recently launched new platform is attempting to bring those levels to more experienced retail forex traders.

M2 Forex, launched in June by US-based Back Bay FX, is aimed at what the company describes as ‘mid-level institutions’ who are unable to gain access to “top tier bank liquidity through their broker” due to their lower levels of volume and deposits. As well as mid-level institutions, M2 Forex are also seeking to be the preferred platform of highly experienced retail investors.

The announcement comes at a time when the US forex market has come under increased scrutiny, with proposed new regulations on what can be traded. The country’s National Futures Association (NFA) has been trying to implement clearer rules for an industry that has been criticised for its lack of transparency in recent years. M2 Forex and its parent company Back Bay are both members of the NFA.

The company’s Chief Technology Officer, Trevor Ford, said in a statement: “We are looking to provide clients with what they have been asking for: the best price feed we could get, scaled commissions depending on volume and/or deposit, and significant benefits to their service without hidden fees and surcharges. We are certain that our commitment to fulfilling client needs will position M2 Forex at the forefront of the US retail forex industry.”

Speaking to Forex Magnates in June, Back Bay’s CEO, Paul Towne, talks about why his firm has chosen to enter a US forex market that has seen regulatory and pricing challenges drive firms away. He said: “We believe that the regulators in the US are looking for a consolidation of the current brokers which will inevitably weed out smaller fringe forex brokers and allow for more established firms operating in other financial markets to gain access.”

The consolidation will mean that institutional investors are likely to dominate the landscape, although firms like M2 Forex will be able to cater for both institutions and retail traders. Towne thinks that it is a model that is likely to be replicated in the future by other players: “With M2 Forex, we provide a boutique style offering with the backing of a larger financial institution allowing our clients access to better pricing and liquidity. Additionally we are providing brokers new business and flexibility without having to adjust their current business model.

“The approach we are taking with M2 may be one of the only access points left for firms that want to position themselves in the US, but do not have $20m in net capital or the time necessary to devote to the regulatory procedures currently in place.”