Forex Transactions Make A Debut On Internet
But currency market experts say the Internet is unlikely to overtake established bank systems as a means of trading. Because CMC has not yet received authorisation from the Securities and Futures Authority, its UK customers are not protected by the Investors Compensation Scheme.
Similar currency schemes - using traditional trading methods - are facing tighter regulation across Europe after complaints by investors who have lost huge sums very quickly. Richard Camotto, an independent consultant to the Bank of England on foreign exchange, said the volatility of the currency market meant that using the Internet would be suspect because of transmission delays.
It's interesting, but the quality of rates must be suspect.
The Internet is not the most efficient system for prices, but it's better than looking in a newspaper.'' As total daily turnover in the currency markets exceeded $1,000bn, it would be a long time before Internet dealing made any impact, he said. ''I can't imagine it would appeal to corporate clients, but I may well be proved wrong.''
Peter Bartko, chairman of the EBS Partnership, a leading electronic broking system, said the difficulties of establishing credit and liquidity over the Internet meant it was only likely to be used as a method of taking orders from clients. Potential customers are required to open an account with CMC, which involves a minimum margin deposit of $20,000 (