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(Bloomberg) -- Currency brokerage Global Brokers NZ Ltd. said it is closing due to losses sustained after the Swiss National Bank’s surprise move to abandon the franc’s cap against the euro.

“The majority of clients in a franc position were on the losing side and sustained losses amounting to far greater than their account equity,” director David Johnson said in a statement dated Jan. 15 and posted on the website of affiliated company Excel Markets. “When a client cannot cover their losses it is passed onto us. GBL can no longer meet regulatory minimum capitalization requirements of NZ$1 million ($781,000) and will not be able to resume business.”

The franc surged as much as 38 percent versus the greenback after the SNB’s surprise move in Zurich on Thursday and gained more than 15 percent against all of the more than 150 currencies tracked by Bloomberg. Volatility jumped to a more than one-year high.

Auckland-based GBL was experiencing “hundreds of withdrawal requests,” Johnson said.

All client funds are in segregated accounts and “100 percent of positive client equity or balance is safe and withdrawable immediately,” he said. However, GBL had sustained “a total loss of operating capital.”

“The interbank market for francs was illiquid for hours after the event and no traders with an open franc position were able to close it for a significant period of time, at any broker,” Johnson said. “News of the impact of this event on companies and traders is just beginning to come to light. As directors and shareholders we would like to offer our sincerest apologies for this devastating turn of events, and to thank you for being such a supportive group.”

To contact the reporter on this story: Matthew Brockett in Wellington at mbrockett1@bloomberg.net To contact the editors responsible for this story: Matthew Brockett at mbrockett1@bloomberg.net Tracy Withers, Garfield Reynolds

Bloomberg