(Adds calls for changes to leverage, FX market regulation, dataon record day of trading)
By Patrick Graham
LONDON, Jan 21 (Reuters) - The co-founder of Russian-ownedAlpari applied a year ago to wind up the parent company of itsretail currency brokerage, fearing it was "doomed" long beforethe company's collapse from trading losses last week, he said onWednesday.
The comments by Andrey Dashin raise questions for Britishregulators, already under pressure over how tightly theycontrolled online foreign currency trading operations, most ofwhich are based in Cyprus while doing business in London.
U.S. National Futures Association is looking at changes toits rules for leverage by retail clients trading currencies,while a lawyer who investigated a currency rate-fixing scandalfor the Bank of England last year told British members ofparliament that currency markets need more regulation.
Dashin, a Russian accountant and banker who formed AlpariRussia in 1998 with four other partners, said he lodged awinding-up petition for Alpari UK's parent company Alpari GroupLtd with a Cypriot court on Jan. 28, 2014.
In a statement emailed to Reuters on Wednesday whichconfirmed remarks made on website forexmagnates.com, he said theapplication was still pending.
"At one point I realised that unless Alpari UK obtains areliable source of funding, it is doomed," he said.
"Unfortunately, it now transpires that I should have filedfor winding up earlier," Dashin said. "Probably in that casethat process would have been completed before the 'BlackThursday' of 15 January 2015, when the unpreparedness of AlpariUK and its lack of any financial buffer caused its collapse."
Alpari, sponsor of Premier League soccer team West HamUnited, is one of two high-profile brokerage victims of theSwiss franc's surge, which pushed the number of forextransactions in a single day to a record high on what is theworld's biggest financial market.
The other major casualty, New York-based FXCM, sawits shares lose up to 86 percent of their value on Tuesday afterit unveiled details of an emergency $300 million loan taken latelast week to prop itself up.
UK-based spreadbetter IG Group and online tradingcompany London and Capital have both announced lossesfrom the day's trade. Denmark's Saxo Bank has imposed costs onclients.
Britain's Financial Conduct Authority said on Tuesdayinitial indications were that the funds of more than 100,000Alpari customers were "whole", although it would take more timeto confirm if there were customer losses.
It had no immediate comment on Dashin's remarks.
Japan's Financial Services Agency also said it had frozenAlpari assets in Japan to cover all of its domestic liabilities.
EU PASSPORT
Retail currency trading has grown quickly in the past 15years, attracting individuals staking their own money with longtrading hours, low transaction costs and the ability to take onhuge risks for a relatively small sum. The trade makes up nearly4 percent of global daily spot turnover of nearly $2 trillion.
Regulation of the sector is patchy. The imposition of largecapital requirements overnight wiped out much of the U.S. sectorin 2013, but Europe has not been so aggressive.
Some 70 of Europe's 90 brokerages are registered in Cyprus,where players said the cost of meeting regulatory requirementsis lower, while EU legislation allows them to "passport" intoother jurisdictions.
"Any one country trying to introduce gold plating ofregulation in these areas can find the business moves somewhereelse," said Richard Reid, a research fellow in banking andfinance at the University of Dundee.
"In this case there would have to be something done at an EUlevel. You can always come up with moral suasion and EUguidelines, but sometimes just turning the spotlight on onecentre can bring pressure on that particular regime."
Responding to Reuters' questions on the issue, a EuropeanCommission spokesman said:
"The recent moves highlighted the need for several nationalfinancial authorities to look into the forex markets and forinvestment firms to have suitable prudential reserves tomitigate the risks involved.
"The Commission believes this is mostly a supervisory issuefor the national financial supervisory authorities concerned." (Additional reporting by Huw Jones; Editing by NigelStephenson, David Holmes and Jane Merriman)
