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FXCM Discussion

Actually upon gathering further information, there is one glaring problem with this move by the CFTC. Apparently accounts in the UK (eg at FXCM UK) are segregated accounts. This means that your money is held in a separate account and cannot be seized by creditors if the broker goes bankrupt. However, FXCM US accounts are NOT segregated.

Yes, believe it or not, this means that the CFTC "in order to protect US traders" will force US traders to move money from where it is segregated and safe back to a US account where it is NOT segregated and can basically disappear if FXCM goes bankrupt. In other words, the CFTC will make US traders have accounts that are LESS SAFE than before.

Just thought you'd all like to know how well your tax dollars are being spent.
Quoting MarcIlgen
Actually upon gathering further information, there is one glaring problem with this move by the CFTC. Apparently accounts in the UK (eg at FXCM UK) are segregated accounts. This means that your money is held in a separate account and cannot be seized by creditors if the broker goes bankrupt. However, FXCM US accounts are NOT segregated.

Yes, believe it or not, this means that the CFTC "in order to protect US traders" will force US traders to move money from where it is segregated and safe back to a US account where it is NOT segregated and can...
You may want to reread/review your broker agreement. I thought I was covered, too; my broker is dbFX (UK), but the Agreement. In some cases, our money pooled or handled in a way that puts it a risk in case of a BK.
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You may want to reread/review your broker agreement. I thought I was covered, too; my broker is dbFX (UK), but the Agreement. In some cases, our money pooled or handled in a way that puts it a risk in case of a BK.

Here is a list on forexfactory of brokers that do indeed offer segregated accounts:
http://www.forexfactory.com/showthread.php?t=62913
FXCM UK is indeed on this list, and in fact ATCBrokers (a terrific US broker which uses FXCM UK's price feed) specifically chose FXCM UK for the account segregation. dbFX isn't on this list. But you are right - it is always a good idea to read the broker agreement and make sure you are protected in the way you think you are.
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It is our interpretation of the Dodd-Frank Bill and CFTC intentions that US residents will be required to repatriate their accounts back to the US. The big question at this point is when will traders be required to do so. This is what we are waiting for our regulators to clarify. A solid indication of a date has not yet been given. Again, as soon as we have these details, I will let you know.

Jason, can you please give some specific details on what exactly it means to traders for their FXCM UK accounts to be "repatriated"? A year ago when I switched from FXCM US to FXCM UK, I vaguely remember that I had to actually fill out a whole new application form, and wire the money back from my US acct to my bank, and then wire the money from my bank into FXCM UK. It was a nightmare and took two weeks to complete. It would be HORRIBLE if traders need to go through a process like that again.

I am hoping that you will tell us that everything will be handled "under the hood" so that we traders don't have to do much of anything (other than possibly fill out a form) and that there will be no loss of trading days. Will this be the case or not?

Also, what about those of use with self directed IRA's through companies like Millennium? Is the account transfer process the same or will it be more complicated?
I heard that the CFTC has no jurisdiction over banks, just brokers. Is this true? If so, then it's time to open accounts at dbFX. The platforms are practically the same, and leverage is 1:100.
Well looks like FXCM will lose some business to banks...hope they don't enlarge the spread, AGAIN, to make up for it.
Quoting MarcIlgen
Here is a list on forexfactory of brokers that do indeed offer segregated accounts:
http://www.forexfactory.com/showthread.php?t=62913
FXCM UK is indeed on this list, and in fact ATCBrokers (a terrific US broker which uses FXCM UK's price feed) specifically chose FXCM UK for the account segregation. dbFX isn't on this list. But you are right - it is always a good idea to read the broker agreement and make sure you are protected in the way you think you are.

Thanks for the info.
Quoting sonicpunk32
I heard that the CFTC has no jurisdiction over banks, just brokers. Is this true? If so, then it's time to open accounts at dbFX. The platforms are practically the same, and leverage is 1:100.

Go back and see Jason's post regarding FXCM's IPO announcement. Look at the sponsors / managers that are signed up with FXCM. I can almost guarantee you, all of them, if they currently accept US customers, will be pulling the plug and suggesting a move to FXCM, USA.

While I don't have any experience with FXCM, they are being very smart. Planning for the future, which I believe will lie in the Futures market. They could very well be the last (OTC) FX man (US) standing when the music stops.
Quoting sonicpunk32
I heard that the CFTC has no jurisdiction over banks, just brokers. Is this true? If so, then it's time to open accounts at dbFX. The platforms are practically the same, and leverage is 1:100.
GoMarkets? How can the CFTC reach extend to Aus? When they have no ties to the US at all?
Quoting pilotui
GoMarkets? How can the CFTC reach extend to Aus? When they have no ties to the US at all?
I thought the issue here was what Jason posted earlier:

"It is our interpretation of the Dodd-Frank Bill and CFTC intentions that US residents will be required to repatriate their accounts back to the US."

If that's the case, then it's not the brokers that will have issues but traders who are US residents. Not sure how they would enforce that, but I wouldn't be looking forward to having the CFTC or even the IRS on my back if it goes that way.

I'm going to wait until after Oct 18th to see what happens before I make any changes; just my 2 cents..
Quoting MarcIlgen
I am hoping that you will tell us that everything will be handled "under the hood" so that we traders don't have to do much of anything (other than possibly fill out a form) and that there will be no loss of trading days. Will this be the case or not?
Last year when the hedging and leverage reduction regulations went into effect, traders were able to move from the US to the UK by submitting an online form. In fact, the form is still available for traders to move from the US to UK. There was no interruption in trading since the transfers occurred over the weekend. As soon as we have these details, I will let you know.
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Last year when the hedging and leverage reduction regulations went into effect, traders were able to move from the US to the UK by submitting an online form. In fact, the form is still available for traders to move from the US to UK. There was no interruption in trading since the transfers occurred over the weekend. As soon as we have these details, I will let you know.

Jason
That was not my experience for IRA accounts. It was a nightmare. If FXCM intends to enforce this, then they really need to streamline the process for IRA accounts and involve Millennium in this process. Otherwise it will be a 2 week nightmare.

Also, what about the issue with segregated accounts? Many of us were in FXCM UK for the very purpose of having segregated accounts. Moving back to FXCM US makes our money less safe. Does FXCM have any plans to address this?
Thanks for the Dukascopy recommendation but you very few that stay in the USA after this legislative fiasco will deserve the pain and suffering you get. "Stockholm Syndrome" is what it's called, ironic isn't it?

Quoting MarcIlgen
This is a bit of a pain but it isn't horrible. I can live with 50:1 leverage. I'm not thrilled with the no-hedging rule since there are times where hedging can come in handy but I don't use it very often. All in all, I can live with this, aside from the temporary disruption.

But for traders who insist on going elsewhere, one good option is Dukascopy Bank. Yes they are a BANK so according to Dodd-Frank they are not regulated by the CFTC. Also they are a terrific broker, based in Switzerland, super-reliable etc. They use JForex instead of MT4 which...
Quoting MarcIlgen
Many of us were in FXCM UK for the very purpose of having segregated accounts. Moving back to FXCM US makes our money less safe. Does FXCM have any plans to address this?
Accounts with FXCM UK are segregated in accordance with FSA client money rules. Segregation comes about due to rules and regulations, and something US regulators will need to address. We understand safety of funds is important for traders in the US which is why we have taken steps to be transparent in our workings including releasing our balance sheet even though we are currently a privately held company.
I just got off the phone with a representative from Millennium Trust. They insist that in order to move to the US, traders must fill out a new US application and fill out a transfer form to transfer the money back to Millennium. Then the trader must fill out another transfer form to transfer the money to the newly created US account. In other words, they insist on exactly the sort of nightmare with 2 weeks of down time that I was worried about.

This is not going to sit well with US traders forced to make this move. FXCM needs to spearhead an effort to streamline this process.
Well, I guess it helps to speak to the person in charge. :-) I just contacted Millennium's VP for the group that handles FOREX. She says the following:

"If this is a standard or regulation set forth by the CFTC, we would not require the clients to liquidate their accounts and return the proceeds to Millennium Trust Company. We would definitely make provisions for these clients as we are aware this is a huge inconvenience for everyone. I will contact FXCM to discuss the details and how these accounts should be handled."

This is terrific news, assuming of course that Millennium and FXCM can work out a procedure that really does streamline the process and minimize or eliminate any trading downtime.

So while I'm not thrilled the CFTC is making us do this transition, I can live with it as long as the procedure for transferring all accounts including IRA accounts is streamlined in this manner.
Just saw a CFTC letter at http://www.forexfactory.com/showpost...4&postcount=10

Based on what I understand from that CFTC letter, I think US residents will no longer be able to use FXCM UK effective October 18th, since FXCM UK is a foreign affiliate of FXCM US.

Correct me if I read it wrong...
Quoting Slack
Look at the sponsors / managers that are signed up with FXCM. I can almost guarantee you, all of them, if they currently accept US customers, will be pulling the plug and suggesting a move to FXCM, USA.
Please excuse my ignorance. But, why do you say that? Is it because Deutsche Bank will now be considered an affiliate of a US broker? (FXCM)
Quoting sonicpunk32
Please excuse my ignorance. But, why do you say that? Is it because Deutsche Bank will now be considered an affiliate of a US broker? (FXCM)
Yes.
I'm done worrying about this. Bring on the 1:50. I'll just need double the initial money. Now they better not make it any worse at least for the next eight years.
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