How is FXDD getting away with no cap nor registration?

How is FXDD getting away with no registration? I remember they use to say they were a part of traditions group but now their site nor contracts make any reference to traditions" nor can I find them on CFTC site,, what gives with these guys?

If you read the CFTC / NFA requirement to be registered, if you conduct futures, you must registered to one of the regulatory body.

Somehow, FXDD does not do futures, and only spot forex, so they don't have to be registered. Seems like a loop hole to me. It won't be long before they pass regulation to close this loop.

The forex has not been declared a "future" and therefore the NFA actually has no jurisdiction over it. The only power the NFA has over forex brokers is the power the broker gives them when they "agree to be regulated" by them. Once the broker signs the forms, the NFA controls them.

FXDD has chosen not to be regulated, probably to keep themselves from being bully'd around by the NFA or larger brokers who control the NFA. In essence, they are the same as North Finance, in that they have only their reputation and name on the line with every customer service call and forex trade placed with them. In my opinion this leads to a much better brokerage, as any upset customer is a huge hit to their reputation when they get back to a site like FF.

It's called free market. The market will decide whether FXDD lives or dies, not any act of congress or NFA changing the rules over night, or the larger brokerages deciding they don't like competition and using the NFA to shut down their competition.

Right on! I like the way you think!

Just remember though, when you are talking "other" brokers, it is not other forex brokers, but the large futures brokers and exchanges (CME, etc.) that have the NFA in their back pockets. If you go to Wikipedia, the is actually a FX Dealers Coalition that is trying to make sure that the Exchanges don't crush spot Forex just because they were too slow and stupid to provide the service we get from reputable brokers.

Just type in Forex Dealers Coalition and it has a much better explanation than what I described. I don't know which brokers are in this coalition though. Anyone have details?

Clif

And in that sense, when they make a major loss in operations or whatsoever, they have the choice to run off with client's money?

If I'm looking out to cheat somebody's money in the broker sense, I'd build up a great customer base, serve them well and proper, make them happy and when I wanna move, I take everybody down.

It is the same case in Hansel and Gretel where the witch feeds them to make them fat and nice to EAT them.

Well North Finance has been around longer than alot of the NFA regulated firms out there, 2001. Recently the NFA has proved it's inability to protect any clients, and many of it's actions have actually harmed any clients involved.

So I guess... if it was between the risk of someone in a well funded brokerage that has been around a while running off with my money, or being under the NFA who could shut my brokerage down tomorrow for having a filing cabinet unlocked and then force all trades closed and spend the next year giving all my money to lawyers. I'd choose the unregulated brokerage.

The NFA does not exist to protect the clients. The CFTC, I will say, does seem to do alot to protect the individual investor. Don't be fooled by the NFA though.

Someone with the business acumen to establish a thriving brokerage (or any business) is well aware that good service and customer satisfaction are the keys to long term profits. It makes no sense to start a business with the sole purpose of taking it down to scam short term profits. It's killing the goose that lays the golden egg.

I'm not saying that this never happens. Certainly it happens from time to time in every industry. The point is, criminals are lazy by nature and there are far easier ways to steal money. Free markets tend to be self regulating. Government oversight tends to encourage corruption.

Obviously, jmo, fwiw.