Proposed NFA Capital Requirement

Quoting zam4ever

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Off-topic:
Care to share some sleazy sales tactics from easy forex?

Thank you for your time to reply my questions.

Have a nice holiday seasons and cheers

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Quoting zam4ever

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Wait a minute, here is a question that keep flying in my head. First of all, I'm not very familiar with US market, but willing to learn more, so please help and guide me.

Before we're going more deep and further discussion, may you help me by sharing more information regarding to others Designated Self-Regulatory Organization (DSRO), described in section (b), from Financial Data for Futures Commission Merchants report such as:

Chicago Board of Trade (CBOT)
Chicago Mercantile Exchange (CME)
New York Mercantile Exchange (NYME)

How about any forex brokers associated with above three? Are they properly audited? What is the major difference between NFA with them?

Is it possible for brokers (from any field) associatwith two or more DSRO?

Please advice and have a nice holiday seasons.

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NFA orders San Francisco firm to pay $35,000 fine

January 2, Chicago - National Futures Association (NFA) has ordered Solid Gold Financial Services Inc. (Solid Gold), a Futures Commission Merchant located in San Francisco, California, to pay a fine of $35,000. The Decision, issued by NFA's Business Conduct Committee, is based on a Complaint filed in November 2007 and a settlement offer submitted by Solid Gold.

The Committee found that Solid Gold used misleading advertisement and submitted false or misleading information to NFA. The Committee also found that Solid Gold failed to provide its customers with required disclosure regarding NFA's Background Affiliation Status Information Center (BASIC) and failed to obtain required information from its customers. Additionally, the Committee found that Solid Gold failed to take applicable concentration charges, failed to maintain the required adjusted net capital and failed to collect the required minimum security deposit.

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CFTC Seeks to Revoke the Registration of Fort Lauderdale-based Worldwide Clearing, LLC

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) filed a Notice of Intent to permanently revoke the registration of Worldwide Clearing, LLC (Worldwide) of Ft. Lauderdale, Florida, as a Futures Commission Merchant.

The Notice alleges that under the Commodity Exchange Act, Worldwide is subject to disqualification from registration based on the September 14, 2007, entry of a consent order of permanent injunction and other equitable relief against it in the United States District Court for the Southern District of New York. The consent order resulted from a CFTC civil complaint filed on September 30, 2005 (see CFTC Press Release 5131-05, October 18, 2005).

The consent order finds that, from November 2004 through at least June 2005, International Currency Exchange, Inc. (IC Exchange) solicited members of the general public to open accounts to trade foreign currency (forex) options. In soliciting prospective customers, IC Exchange knowingly or recklessly made misrepresentations regarding the risks and rewards of trading forex options. The consent order finds under its introducing agreement and in the course of conduct, IC Exchange acted as Worldwide’s agent in soliciting customers to open accounts with Worldwide for the purpose of speculating in forex options and that as a result, Worldwide is liable for IC Exchange’s fraud.

The consent order prohibits Worldwide from seeking registration with the CFTC in any capacity and imposes a $130,000 civil monetary penalty and restitution of $670,000 on Worldwide.

The following CFTC Division of Enforcement staff are responsible for this action: Eliud Ramirez, Nathan Ploener, Manal Sultan, Lenel Hickson, Stephen J. Obie, and Vincent A. McGonagle.

Quoting forexsavior

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7) ODL Securities: $2,566,000
Ravaged by undercapitalization issues.

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Quoting forexsavior

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I don't believe any of the major forex brokers clear their forex trades through the exchanges as that would be highly inefficient.

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Quoting forexsavior

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Today is the day when the $5 million minimum capital requirement rule takes effect. News out of Money Garden is that they are dropping their high leverage accounts in order to comply with the new rule. That means no more 400:1 leverage from MG, or 200:1 for that matter.

The following firms have still not publically indicated they have met the requirement. Beware these firms until further notice:

1) SNC Investments: $1,152,000
They are well below the $5 million capital requirement. It is highly unlikely they will make the new requirement at this point. I advise customers to leave this firm and look for greener pastures.

Update: Just went to their website and there is no reference at all to being able to open an account with them. I suspect they are just going to be an introducing broker from now on.

2) Wall Street Derivatives: $1,228,000
This firm is based out of New Zealand and I'm not even sure they have any U.S. customers as their U.S. website is out of service.

3) Advanced Markets: $1,322,000
Amifx is already teetering on the brink as they are the subject of a business conduct committee case before the NFA in which they are cited for a whole host of financial violations including not meeting the old capital requirement. This firm does not have much of a future.

4) AlpariFX $2,481,000
Little known European firm. Well under the cap requirement.

5) Solid Gold Financial: $2,040,000
Solid Gold's future is now in serious doubt. Like many of the other firms on this list they have been charged by the NFA with failing to meet their existing capital requirement. When you can't meet the old requirement it stands to reason you won't be able to meet the new one either. Solid Gold is anything but a solid investment at this point.

6) Bacera Corporation: $2,300,000
Like a turd that won't flush Bacera Corporation just refuses to go down the drain. The Savior wrote Bacera off over the summer as sources knowledgeable about them stated they were going to close up shop. But no, they are still hustling the folks in LA for fresh deposits. In September Bacera settled a complaint with the NFA after it was discovered they were undercapitalized to the tune of $1.2 million. NFA reported Bacera only has about 200 customers as it is. But to those 200, do yourself a favor and get yourself another broker because sooner or later the pipes are gonna get cleaned and these guys are going to get flushed once and for all.


Update: They published their Holiday Trading Schedule on their website. So they apparently don't plan on closing their doors. Do they have the money? Is the CFTC going to raid the place after the Holidays? We'll soon find out.

7) ODL Securities: $2,566,000
Ravaged by undercapitalization issues.

8) Forex Club: $3,320,000
They still have not hit the minimum $5 million mark. And don't forget since they are a market maker they have other financial requirements to meet as well. They still haven't publically done so.

9) Easy Forex: $3,789,000
Under siege for their sleazy sales tactics, it's hard to imagine the NFA isn't going to drop the hammer on them soon.

So now what? Judging from the NFA's website it doesn't appear they will be moving in for the kill yet. In fact, it may not be until January that we find out who will survive and who will perish. So if you have any money at these at risk firms get it out now. And Merry Christmas!

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Quoting AKforex

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Last report on Net Capital :
http://www.cftc.gov/files/tm/fcm/fcmdata1107.pdf

Alparifx $6,495,755
ODL Securities $13,040,644

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NFA reports four forex firms have ceased operations in light of increased capital requirements

January 11, Chicago - National Futures Association (NFA) announced today that four of its Forex Dealer Members (FDMs) have ceased operations as a result of NFA's new $5 million capital requirement, which became effective on December 21. In addition, six additional FDMs have ceased operating since September 1, 2007.

"When NFA's Board of Directors adopted the increased capital requirement on August 15, 2007, NFA had 34 registered FDMs," said Regina Thoele, vice-president of Compliance. "As of December 31, 2007, that number has decreased to 24."

The four firms that were unable to meet the new capital requirement and ceased operating transferred their customer accounts to other FDMs.
"We closely monitored each of the firms to ensure that customer funds were transferred to another, fully-capitalized firm," says Thoele.

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NFA President urges House Subcommittee to address forex regulatory issues in CFTC reauthorization bill
Intro http://www.nfa.futures.org/member/ne....asp#Testimony
Full version http://www.nfa.futures.org/news/news...ArticleID=1968

NYMEX Supports Commodity Futures Trading Commission Reauthorization Act of 2007
http://www.marketwatch.com/news/stor...TQP_Mod_pressN

House moves CFTC reauthorization forward
14/12/2007
The House Committee on Agriculture passed a measure to reauthorize Commodity Futures Trading Commission (CFTC).
http://www.fow.com/Article.aspx?ArticleID=1787472


FOR IMMEDIATE RELEASE December 12, 2007
Commodity Futures Trading Commission Reauthorization Approved
http://www.house.gov/apps/list/press...TC_reauth.html

http://overcriminalized.com/lu.cfm?PrettyID=4605

http://agriculture.house.gov/inside/...n/110/CFTC.pdf


http://thomas.loc.gov/cgi-bin/thomas search H.R.4626

Quoting BurgerKing

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Stop them from Stop Hunting!
Stop them from delayed execution!

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Quoting Pip Hunter E

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That's the real way to fix the industry. More regulation on HOW a FX broker is run, and then audits, audits, and more audits.

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Quoting fxchant

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But the beauty of self-regulation is that you can squeeze out the competition and not worry about the customer!

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