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  • #341
  • Aug 29, 2007 3:37pm Aug 29, 2007 3:37pm
Quoting jamesanderson
Wow, if Forex Savior works for FXCM then who do you think WhipSawFX works for? I have seen the same post on several forums today. WhipSaw, you're bringing up OLD news and frankly I'm not sure how relevant it is.
Hahaha,
Thanks James, if only. Nope, sad to say I am in no way what so ever in the employment of any FDM, or recieved any financial or other compensation for my posting.
Good Trading to you,
  • #342
  • Aug 29, 2007 3:47pm Aug 29, 2007 3:47pm
Quoting forexsavior
LOL! You keep believing that FX Chant. Meanwhile, the rest of the industry is moving on to address the capital requirement issue.
I will keep believing it because it has nothing to do with what the industry is about to do. It has to do with the fact that the letter that you posted from the company that is based 5 miles from your home address is not just a cheap shot at scaring people toward them, but I would consider highly unethical by standard business practices, and I suspect that it will actually backfire on them.

Having said that, I continue to expect and hope that the industry tightens up in many regards, as I have been saying long before your dog-and-pony show came to these boards.
FXChant Singing the World of Forex
  • #343
  • Aug 29, 2007 4:25pm Aug 29, 2007 4:25pm
Quoting forexfun
Of course it is, they're trying to swipe business by spreading fear. That's why this letter seems to be circulating everywhere. They didn't merely say "We have 5 million, we're good", they went on to disparage other companies. They didn't stop there with smaller firms, they also implied larger firms would have problems too (I wonder why larger firms would have problems, but they're ironclad on the basis of the numbers, or so they imply)

They're trying to swipe business. I guess they're legally in the right, ethically though...

And I have no idea who Whipsaw works for - he doesn't seem to like FXCM, but he posted 3 companies with high funding who he implies would be okay.
ForexFun, I dont have any relationship other than potential customer of FXCM, as with many of the other FDM's. My recent posts have been only concentrated on FXCM as they are the largest and seem to benefit from the thread that forexsavior has posted simultanously on all forums Im aware of. That and they are appear to be doing their best to portray themselves in a good light to potential customers from the smaller FDM's. This isn't wrong, it just seems that its useful to post something to let people know theres more to deciding where you trade than the net capital requirements.

Let me emphasis again, I am in no way qualified to say whether FXCM is a good company or not, I can only state what my experience has been, which has not been with FXCM. I have simply posted what I found whilst doing my due dilligence

Personally, as you would see from my posts on OANDA, I really dont see such an issue with the net capital requirements, and would prefer it if they remained the same to encourage competition. Raising them to $5 seems to reduce competition which seems somewhat unAmerican to me. I'd say

In the sense of full disclosure, I have a couple of dollars with OANDA, and would say my experience with them has been very positive. But, there are issues if your a 'newstrader' for example. I would recommend anyone does their due dilligence and finds the platform which most suits the way you wish to trade. If your a news trader, I would probably look at an ECN broker, where the spreads dont change during news events.
  • #344
  • Aug 30, 2007 10:51am Aug 30, 2007 10:51am
That is the title of an article by John Jagerson over at PFXglobal:
http://www.pfxglobal.com/index.php?o...459&Itemid=116

The retail forex business is young and relatively unregulated but that won't last. I was surprised that the regulators have not moved faster in the U.S. when the Refco disaster occurred a few years ago but we are starting to see some action. What's coming down the pipeline might affect your dealer so do your homework and check them out.

Because many forex dealers are headquartered in the U.S. they are subject to the NFA and the CFTC. Although registration requirements for FCMs (Futures Commission Merchants) have been loose in the past, they are tightening fast. There are two big changes coming down the pipe. The one I think retail traders should be aware of is the change to the net capitalization requirement. There is a minimum amount of cash (outside of customer accounts) that an FCM has to have to stay in business. That minimum used to be $250,000 then was recently raised to $1,000,000 and it is now going to be raised to $5,000,000 in the very near term. Did you know that if you are working with a dealer in the U.S. you can find out how much net capital they have? Just go the the CFTC's website and look up their financial data for FCMs. In fact, if you google "CFTC" it will give you a link right to the spreadsheet you want to look at. There is a bunch of other interesting goodies in that spreadsheet as well.

The bottom line is that you should know whether your dealer can meet those requirements because if they can't your account could be tied up while they shut down their operations or raise capital. I realize most of us are working with large dealers but smaller boutique firms have a certain appeal and service levels that attracts a lot of traders. Just make sure you are not working with someone that is too small.

Couldn't have said it better myself...
  • #345
  • Aug 30, 2007 10:52am Aug 30, 2007 10:52am
Hey Guys ~

The President of MB Trading has written up a post that was used on another board in regard to the net capital issue, and I wanted to put it up over here since it is coming straight from his mouth, even though it says what we’ve said for weeks now. We’ve received a ton of e-mails in the last day or two since a certain HIGHLY QUESTIONABLE e-mail went out from one of our competitors that I think soured a lot of people against that particular broker due to its overall tone. Based on the actions of some of the “desks” out there and based on the e-mails that we have received inquiring about our product, I suspect that our model is having a much larger impact on this industry than many (maybe even us included) might have expected by this point. We certainly feel confidence in our current growth rate, and keep in mind that our liquidity only gets better and better as more and more of these traders trade with us, since you provide liquidity for each other. It’s a REAL good time for Omega, don’t ya think?

 At any rate, this is what Steve Demarest, President of MBT, had to offer:

 "To understand the MBT model would be helpful in understanding why meeting the current cap requirements of the NFA is plenty sufficient at this time. Anyone can make the claim that there is risk even if we do not have proprietary trading risk like that of deal desks. I guess there is risk of a tsunami engulfing MBT but I don't spend my days dwelling on it. We have ample capital to substantiate the basic business risks associated with agency trading, which is what MBT offers. We have also taken several measures to protect MBT against catastrophic events and natural disasters as well. I think you get my point. With that being said I want to discuss my primary focus which is that of the customers. MBT has always treated our customers with their best interest at heart and will continue to do so. Just because there is some obvious scare campaign going on to overcome either technology or culture inadequacies, I would never consider diverting my focus of offering the best product to my customers. So, in an effort to grow and give customers what they want and need, I do not feel compelled to raise our net cap at a time that does not require it. Back when the NFA raised net cap from 250k to 1 million MBT met the requirement. If at the time the NFA raises the net cap to 5 million, then guess what? MBT will meet the requirement at that time. To meet it before would potentially take resources away from developments at the cost to the customer. I won’t do it. MBT is privately held, financially sound (with no debt) and will continue to operate in the highest standard. I normally would not have responded since I feel confident that those reading this over the past month or more can read between the lines of what is going on, but since a customer of MBT asked me to respond, I felt compelled to accommodate. I leave everyone with this..... If the goal here is to give forex customers of the world comfort in knowing that because the firm you should be with is safer since it has so much in assets, then look at the firms that were listed as the safest based on asset size. Ask yourself one question, how did they get so much in assets? Hint, they don't charge commissions. I hope this helps those that might have needed some input on the matter. Best to all."
  • #346
  • Aug 30, 2007 12:31pm Aug 30, 2007 12:31pm
Quoting WhipSawFX
Here's a couple of snipets I stumbled upon whilst looking up the regulatory history of the best capitalised forex firms.

In November 2005, FXCM was fined $110,000 to settle a complaint brought against them by the NFA claiming violation of Rule C.R.2-36(b)(1) which is defined as "Cheat, defraud, deceive forex customers" . FCM in no way admitted or denied the charge, and made the settlement with the NFA. You can find the details here :
BASIC Case Summary

In January 2006, the NFA did a follow up audit. The follow on audit revealled that FXCM had not abided by the agreement which had the resolved the previous regulatory action. Thus the NFA initiated another complaint against FXCM, which is as yet unresolved (I believe) for violation of Rule C.R.2-36(b)(1) which is defined as "Cheat, defraud, deceive forex customers"
The audit also identified potential failings of "FXCM's anti-money laundering program (AML) "as evidenced by the high number of accounts FXCM opened for Nigerian nationals, without identifying those accounts as high risk for potential money laundering." [quote from http://www.nfa.futures.org/basicnet/...px?seqnum=1023 ]
You can find the details here :
BASIC Case Summary
The particular concern about Forex companies opening accounts for Nigerian nationals is that Nigeria is the origin of a number of internet scams commonly called the "Nigerian 419 Scam" If you dont know what the Nigerian 419 scam check out the the following very entertainment link :
Ebola Monkey Man: Nigerian 419 Scam

I personally wouldnt go near any Forex Dealer Merchant that had been subject to regulatory action, let alone bought to book for violation of Rule C.R.2-36(b)(1). I've done a check and found the following 3 firms have not been subject of any regulatory action, and are the best capitalised.

GLOBAL FUTURES & FOREX LTD (http://www.GFTforex.com/)
http://www.nfa.futures.org/basicnet/...d=0279553&rn=N

OANDA ( http://fxtrade.oanda.com/ )
http://www.nfa.futures.org/basicnet/...d=0325821&rn=N

FX SOLUTIONS LLC (http://www.fxsol.com)
http://www.nfa.futures.org/basicnet/...d=0312620&rn=Y

Inserted Code
COMPANY      | Net capital| Required  | Excess     | Multiple
GFT          | 49,664,118 | 6,904,864 | 42,759,254 | 7.19x
OANDA        | 49,222,317 | 9,172,410 | 40,049,907 | 5.37
FX Solutions | 17,295,130 | 2,064,386 | 15,230,744 | 8.38
Does anyone else knows of any FDM's with no regulatory problems and are well capitalised ?


disclaimer : I in no way qualified to say that fxcm is Cheating, defrauding, or deceiving forex customers, or that they ever have. However, our regulatory body the NFA have made complaints that they have.
My name is David Waring and I am the Managing Director in charge of Business Development here at FXCM. I came across this post and would like to address the community with a response to make sure that both sides of the story are properly represented.

On December 8th, the National Futures Association ("NFA") filed a complaint against FXCM. The NFA complaint alleges that certain promotional material used by FXCM and some of its Introducing Brokers was deficient. The NFA also cited FXCM for a single alleged deficiency in its anti-money laundering ("AML") compliance program.

FXCM maintains comprehensive compliance and AML programs and has long since addressed all of the issues identified by the NFA in the complaint. We believe our firm has more staff and resources dedicated to compliance than all other Forex Dealer Members and most other Futures Commission Merchants. We have terminated hundreds of Introducing Brokers and turned away millions of dollars of potential business due to compliance related concerns. In light of our significant investment in compliance infrastructure and training, FXCM is troubled by the NFA's decision to bring this current complaint. Accordingly, FXCM will be exploring all options presently available to it, including litigation, to bring this matter to conclusion in a manner that gives proper acknowledgment to FXCM's integrity and the strength of our compliance program.

The NFA complaint comes more than six months after the conclusion of a routine NFA on-site examination of FXCM, which itself lasted almost six months. During this examination, FXCM provided NFA with unrestricted access to thousands of documents, including complete records of all promotional material used by FXCM. These records of promotional material included access to websites and copies of all forms of advertising used by the firm such as web banner ads, web click ads, e-mails and print media.

The NFA complaint identifies five instances where it alleges FXCM used deficient and misleading promotional material. Two of the examples cited by NFA are as follows:

1. "Whichever web site you use - FXCM or FXCM TR - you will be able to experience the same excellent order execution, price certainty and 24-hour support."

2. "Benefits of Forex Trading . . . Leverage up to 200 to 1" and "Benefits of Foreign Exchange Trading . . . Leverage up to 100 to 1."

FXCM believes the statement in Example 1 above is true and not misleading. The statement suggests that regardless of which website a client chooses to use, FXCM's award winning trading platform will be the principal client interface providing pricing. FXCM also believes that the statements contained in Example 2 above are not deficient or misleading. The statements in Example 2 with respect to leverage appeared in an FXCM Trading Seminar PowerPoint presentation which contained a full page risk disclosure slide at the outset dedicated to the issue of leverage risk. The risk disclosure stated in part: "Leveraged foreign exchange and options trading carries a significant level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you." FXCM believes that the NFA's published interpretive guidance on leverage risk disclosure does not require repeated risk disclosures each and every time the availability of leverage as an account feature is mentioned in a single piece of promotional material.

The NFA complaint also alleges marketing deficiencies on the websites of a small number of Introducing Brokers. As part of its compliance program, FXCM regularly monitors the websites and promotional material used by FXCM's hundreds of Introducing Brokers. Each week FXCM's compliance staff reviews hundreds of webpages and, while the process is not infallible, various types of deficiencies are routinely identified and then communicated to the Introducing Broker so that they can be corrected promptly. Several of the examples of alleged promotional material deficiencies identified by the NFA in its complaint had already been identified by FXCM's compliance staff through routine surveillance and were either in the process of being remedied or had been remedied prior to the conclusion of NFA's on-site examination.

The NFA complaint also alleges that FXCM failed to establish and implement an adequate AML program. This allegation is especially unfortunate as the fact is that FXCM maintains a vigorous and comprehensive AML program. Under a provision of the USA Patriot Act and applicable federal regulations, FXCM submits its AML program to an independent, outside audit each year and has never been cited for any deficiencies in its AML program.

The allegation contained in the NFA complaint with respect to the FXCM's AML program centers on the NFA's claim that FXCM failed to identify a small number of accounts from Nigeria as "high risk accounts." During the NFA's on-site examination of FXCM, we explained to the NFA managers that because FXCM already had in place a comprehensive, individual account review program, FXCM did not believe that its Nigerian accounts needed to be subject to additional due diligence as discussed in the Interpretive Notice to NFA Compliance Rule 2-9. We explained further that the Interpretive Notice to NFA Compliance Rule 2-9 clearly states that with respect to "high-risk" accounts the decision as to what "if any, additional monitoring of account activity is appropriate" is left up to the discretion of the individual firm. At no time has the NFA suggested or alleged that any money laundering took place at FXCM. The NFA has also not suggested or alleged that FXCM was required to perform any additional due diligence with respect to activity in these accounts. Rather, the NFA's sole allegation with respect to AML appears to be with respect to the how these accounts were designated or "coded" internally. We do not believe that a dispute over this single issue amounts to a failure by FXCM to "establish and implement" an adequate AML program.

FXCM is committed to being the forex industry leader in compliance and adheres to the highest standards in carrying out all of its regulatory obligations. Please do not hesitate to contact us at [email protected] if you have any further questions or concerns about this matter.


Sincerely,

David Waring
Managing Director
FX Business Development
Forex Capital Markets LLC
32 Old Slip, 10th Floor
New York, NY 10005
Tel (212) 897-7660
Fax (212) 897-7669
Email: [email protected]

  • #347
  • Aug 30, 2007 12:35pm Aug 30, 2007 12:35pm
Quoting FXCMDavid
My name is David Waring and I am the Managing Director in charge of Business Development here at FXCM. I came across this post and would like to address the community with a response to make sure that both sides of the story are properly represented.
sweet
Relax and be happy.
  • #348
  • Aug 30, 2007 2:16pm Aug 30, 2007 2:16pm
Many forum users have been asking for a specific link to the National Futures Association website so that they can read the proposal for themselves and hear it from the regulators themselves. Well, here it is:

http://www.nfa.futures.org/news/news...ArticleID=1942

As you can see the National Futures Association has spelled out clearly why they wish to raise the minimum capital requirement to $5 million. They apparently mailed out the formal proposal to the CFTC by Federal Express on August 17, 2007. So it looks like the NFA has fully signed off on the proposal. Now all that is required is the CFTC's approval.

I would strongly encourage everyone to read through the NFA's reasoning for increasing the minimum capital requirement at this link here:
http://www.nfa.futures.org/news/news...ArticleID=1941

Everyone will have their own quotes they will highlight. Here are the ones I found most interesting:

"NFA received sixteen comments regarding the proposal. Eight commenters supported the increased capital requirement and eight opposed it."

"The comment letters that opposed the proposal noted that it will likely eliminate a number of the smaller FDMs. These smaller FDMs will be, obviously, those with less capital. The comment letters in opposition also noted that more capital does not necessarily mean that an FDM is better able to support and properly operate its forex activities. While more capital does not necessarily correlate to "better" FDMs, more capital does mean that they will have, at a minimum, a greater financial stake in running their forex businesses."

"One comment letter also noted that an FDM's risk-management and operational internal controls are more important than the amount of capital an FDM has. NFA agrees that an FDM's internal controls are important and, under separate cover, NFA is submitting for Commission approval a new rule to ensure that FDMs have proper internal controls."

"Several FDMs pointed to the recent MRAs and receivership proceedings as evidence that the current regulations are working. Regulating solely by enforcement proceedings is not the best way to protect customers, however. One of these FDMs claims that staff was unfair in its characterization of the problem with FDMs and forex. Specifically, this FDM pointed out that the number of bankruptcies involving traditional FCMs and FDMs is the same, with two of each.5 What this FDM does not recognize, however, is that the two traditional FCM bankruptcies occurred over a seventeen-year history of regulation, while those for FDMs has occurred in only a little more than seven years. Moreover, the traditional FCM population has average around 250 while the FDM population has averaged around 40."

All those critics who've been saying how "alarmist and irresponsible" my postings are now owe me an apology. The NFA itself is saying that the smaller firms opposed to the measure were telling the NFA the proposal could possibly eliminate them! That's right, some of the smaller firms in the Dead Pool we're telling regulators "you know this proposal could put us out of business." Yet when I say the same thing to the trading public the call goes out I'm "scare mongering." I'd love to know which firms opposed the rule and why they did. Wouldn't it be amusing to know which firms are right now telling their customers "nothing to worry about this rule won't have any effect on us" while they are pleading with regulators "please don't pass this or we could be forced to go out of business!"

In any case the NFA has apparently brushed aside the dissenters. They have officially put the rule on the table and all it will now take is the CFTC's signature. Apologies will be accepted in the order they are received
  • #349
  • Aug 30, 2007 2:34pm Aug 30, 2007 2:34pm
Quoting forexsavior
All those critics who've been saying how "alarmist and irresponsible" my postings are now owe me an apology. The NFA itself is saying that the smaller firms opposed to the measure were telling the NFA the proposal could possibly eliminate them! That's right, some of the smaller firms in the Dead Pool we're telling regulators "you know this proposal could put us out of business." Yet when I say the same thing to the trading public the call goes out I'm "scare mongering." I'd love to know which firms opposed the rule and why they did. Wouldn't it be amusing to know which firms are right now telling their customers "nothing to worry about this rule won't have any effect on us" while they are pleading with regulators "please don't pass this or we could be forced to go out of business!"

In any case the NFA has apparently brushed aside the dissenters. They have officially put the rule on the table and all it will now take is the CFTC's signature. Apologies will be accepted in the order they are received
And once again, you prove our point, and the scare-mongering continues.

Has anyone here said that if the requirement goes to $5 million that firms that don't have $5 million won't be put out of business? No. Seems pretty basic and logical that if the requirement is $5 million and a firm doesn't have it, they can't continue to operate. I don't think one person on this board has said anything to the contrary that I am aware of.

Has anyone here implied that customer funds would be at risk just because one of these firms that didn't get over $5 million AFTER the requirement gets raised to $5 million would potentially be lost to the customer? Yes. You. The original post was a warning telling customers to pull their funds out of all of the firms on the list because they were "Dead Firm's Walking."

Is that a factual statement? No. There remains no evidence that there is a link to this issue and whether customers will be able to pull their funds. Customer funds are not at risk if these firms close down.

Is there any proof to the notion that firms that aren't choosing to show $5 million today will be closed down once the requirement passes? No. None whatsoever. Although I expect several will (or they will merge up out of necessity), several of the firms will have no problem showing the funds when they want to or raising the funds in time.

The truth remains that the risk to trading with any firm now is not about whether they are about to be able to meet the requirement. CUSTOMER FUNDS are not in jeopardy just because of what the NFA does here. You continue to try to cloud that link, like Bush saying that Iraq was involved in 9/11. It remains untrue.

The apology that is owed, but of course, will never be given, would be from you to all of the firms that do meet the $5 million requirement after it takes effect for your attempts to scare the public away from them when they never had an issue to begin with.

Let me ask you this. How many CUSTOMERS do you believe are going to lose their money in their accounts because of the new net cap requirement?
FXChant Singing the World of Forex
  • #350
  • Aug 30, 2007 2:41pm Aug 30, 2007 2:41pm
Quoting forexsavior
"One comment letter also noted that an FDM's risk-management and operational internal controls are more important than the amount of capital an FDM has. NFA agrees that an FDM's internal controls are important and, under separate cover, NFA is submitting for Commission approval a new rule to ensure that FDMs have proper internal controls."
This is the quote that is very interesting. If the NFA is going to be taken seriously, they should implement tougher standards on the firms showing heavy market risk on each day of the month, not just the last day of the month for net cap purposes. It will be very interesting to see what they do toward this item over time, as this will probably do the most to protect the consumer from the risks that firms take when trading against them.
FXChant Singing the World of Forex
  • #351
  • Aug 30, 2007 2:41pm Aug 30, 2007 2:41pm
Quoting fxchant
Customer funds are not at risk if these firms close down.
Of course, the public should rely on the all knowing, all seeing FX Chant for their advice. Right now there are customers at One World Capital who can't get their funds out. So already you have been proven wrong before the rule even goes into effect.

Of course some firms will survive, and some won't (as some of these firms have admitted to the NFA itself.) But there is no way of telling and so traders should beware.
  • #352
  • Aug 30, 2007 2:50pm Aug 30, 2007 2:50pm
Quoting forexsavior
Of course, the public should rely on the all knowing, all seeing FX Chant for their advice. Right now there are customers at One World Capital who can't get their funds out. So already you have been proven wrong before the rule even goes into effect.

Of course some firms will survive, and some won't (as some of these firms have admitted to the NFA itself.) But there is no way of telling and so traders should beware.
But again, you aren't answering the question. You have implied from the start that the fact that the NFA is doing this is going to push these firms under, and thus customer funds are at risk. You just blurred that line again. Customers who can't get their funds out of One World aren't having that problem because of what the net cap requirement is. They are having that problem because One World BLEW IT.

So let me ask it again and see if you will answer. How many customers do you believe are going to lose their funds at any of these brokers simply because of the NFA's raising the net capital requirement?
FXChant Singing the World of Forex
  • #353
  • Aug 30, 2007 2:53pm Aug 30, 2007 2:53pm
Quoting fxchant
But again, you aren't answering the question. You have implied from the start that the fact that the NFA is doing this is going to push these firms under, and thus customer funds are at risk. You just blurred that line again. Customers who can't get their funds out of One World aren't having that problem because of what the net cap requirement is. They are having that problem because One World BLEW IT.

So let me ask it again and see if you will answer. How many customers do you believe are going to lose their funds at any of these brokers simply because of the NFA's raising the net capital requirement?
Where have you been FX Chant? One World doesn't have the funds because they are a poorly capitalized, poorly run firm. EXACTLY the kind of firm the NFA is looking to weed out of the industry with this proposal! And quite frankly I have no idea how many customers will lose their money. For me, one customer losing their money is too much. And so my message is BUYER BEWARE.
  • #354
  • Aug 30, 2007 2:56pm Aug 30, 2007 2:56pm
Quoting forexsavior
Of course, the public should rely on the all knowing, all seeing FX Chant for their advice. Right now there are customers at One World Capital who can't get their funds out. So already you have been proven wrong before the rule even goes into effect.

Of course some firms will survive, and some won't (as some of these firms have admitted to the NFA itself.) But there is no way of telling and so traders should beware.
Why stop there? Let's continue. I think it is a fair assessment that several of the firms on the list were set up as bucket shops with only their interests and not the interests of their customer at heart. Let's say two of them have $2.5 million showing in net cap each. So they merge. They now have $5.0 million and meet the requirement. Does THAT imply that the customer is safe now that they meet the new NFA requirement? Doesn't it really just mean that they are going to continue to rape and pillage the customers that they sucker into their platform?

You've said one thing from the start that I continue to agree with. Traders should beware. Do your full due diligence on any platform before you give them money.
FXChant Singing the World of Forex
  • #355
  • Aug 30, 2007 3:04pm Aug 30, 2007 3:04pm
Quoting fxchant
Why stop there? Let's continue. I think it is a fair assessment that several of the firms on the list were set up as bucket shops with only their interests and not the interests of their customer at heart. Let's say two of them have $2.5 million showing in net cap each. So they merge. They now have $5.0 million and meet the requirement. Does THAT imply that the customer is safe now that they meet the new NFA requirement? Doesn't it really just mean that they are going to continue to rape and pillage the customers that they sucker into their platform?

You've said one thing from the start that I continue to agree with. Traders should beware. Do your full due diligence on any platform before you give them money.
That's a fair point FX Chant. Look I fully support the NFA's internal controls arguments as well. Perhaps I have not stressed that enough. And at that point that is where those internal control points will kick in and make life very hard on that kind of bucketshop described. Also, remember before those bucketshops merge they have to get NFA approval which is no guarantee since the NFA is not looking to hand out licenses to these kinds of firms anymore.

But the NFA has to start somewhere and raising the minimum capital requirement is step one in what I expect to be a real tightening in the industry. Over all the NFA is really taking the bull by the horn. I suspect that once the industry consolidation is complete dealing practices will get scrutinized as well, as they should.
  • #356
  • Aug 30, 2007 3:08pm Aug 30, 2007 3:08pm
Quoting forexsavior
That's a fair point FX Chant. Look I fully support the NFA's internal controls arguments as well. Perhaps I have not stressed that enough. And at that point that is where those internal control points will kick in and make life very hard on that kind of bucketshop described. Also, remember before those bucketshops merge they have to get NFA approval which is no guarantee since the NFA is not looking to hand out licenses to these kinds of firms anymore.

But the NFA has to start somewhere and raising the minimum capital requirement is step one in what I expect to be a real tightening in the industry. Over all the NFA is really taking the bull by the horn. I suspect that once the industry consolidation is complete dealing practices will get scrutinized as well, as they should.
Agreed. Now let's wait and see what firms pony up the cash and then pass our judgments on which platforms give the customer the best shake. So I'll talk to you in January, then? LOL.
FXChant Singing the World of Forex
  • #357
  • Aug 31, 2007 1:29am Aug 31, 2007 1:29am
Quoting forexsavior
All those critics who've been saying how "alarmist and irresponsible" my postings are now owe me an apology.
Despite the fact that you changed the name of the "dead pool", you still don't grasp how simply reporting information and sensationalizing it are two different things.

By posting things like "dead pool", you make people believe that a company in said list was dead and buried, when that is not actually the case. You later agreed on some of these that this wasn't actually the case, that some of them will survive. Of course, it's too late for that admission, because your dead pool, as worded, was posted like 50 times across the internet, so changing it here months later is long long after the fact. I guarantee you scared off people from some of those companies, and probably some people from companies that will actually survive and which did nothing wrong.

The article you quote does not use the same language you did, and yet you continue to miss that point. The point was never that there would be companies that would miss a 5 million mark if passed and as such would be out of business. There's not a person on this thread who said that every single company below five million currently would survive. The point was that you automatically acted as if they'd all be out of business and thus people should pull their money NOW rather than a) see if the proposal passes b) give their company a chance to prove they could make a new cap requirement when it happens. You told them to get out and get out now. It was only later that you modified that tone, but the damage was probably still done.

Sensationalizing and reporting are two things. While you bring important information to light, it's HOW you present it that makes the difference between being a respectable newspaper and being a tabloid.
  • #358
  • Aug 31, 2007 4:18am Aug 31, 2007 4:18am
Quoting forexfun
Sensationalizing and reporting are two things. While you bring important information to light, it's HOW you present it that makes the difference between being a respectable newspaper and being a tabloid.
QFA
  • #359
  • Aug 31, 2007 9:49am Aug 31, 2007 9:49am
"Evil flourishes when good men do nothing"

The NFA is obviously very concerned with the 'internal' actions of many FX broker firms:

Notice I-07-32

August 28, 2007 Effective Date of Amendments to NFA Interpretive Notice Regarding Enhanced Supervisory Requirements

Happy birthday to me!

These changes will take place Nov. 1, 2007

For details:
http://www.nfa.futures.org/news/news...ArticleID=1943

I would also like to add that the NFA often uses complaints filed by investors as a basis for new amandments to regulate brokers.
  • #360
  • Aug 31, 2007 10:08am Aug 31, 2007 10:08am
What does this part of that proposal mean:

"update the enhanced ANC obligation under the Requirements to impose minimum ANC requirements of $2,000,000 on affected Forex Dealer Members ("FDM"s), $1,000,000 on affected non-FDM futures commission merchants, and $250,000 on other Member categories;"

?
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