Proposed NFA Capital Requirement | Page 32 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

NFA case against Forex.com/Gain Capital 6 replies

NFA Takes Action Against Gain Capital 27 replies

What happens to brokers not meeting the NFA capital requirement? 4 replies

Is losing a requirement to be successful? 72 replies

MIG vs Northfinance Margin Requirement 2 replies

Attachments: Proposed NFA Capital Requirement
Exit Attachments

Proposed NFA Capital Requirement

  • #621
  • Jan 23, 2008 12:38pm Jan 23, 2008 12:38pm
With Congress set to increase capital requirements to $20 million and with the NFA having previously narrowed down the list of U.S. Brokers to 24 I thought it helpful to post the numbers for the remaining brokers in business so everyone knows where the industry is at in the here and now:

According to the latest CFTC Report:
http://www.cftc.gov/marketreports/fi...fcms/index.htm

Advanced Markets $1.3 million
Alpari $6.4 million
Bacera $3.1 million
CMC $2.7 million
CMS $11.4 million
Easy Forex $7 million
Forex Club $4.8 million
Friedberg Mercantile $7.9 million
FX Solutions $26.9 million
FXCM $75 million
Gain Capital $50 million
GFS Futures & Forex $3.6 million
GFT $57 million
Hotspot $6.1 million
I Trade FX $23.8 million
IFX $17.1 million
Ikon $9.1 million
Interbank FX $30 million
MB Trading $6.6 million
Money Garden $5.3 million
Oanda $159 million
ODL $13 million
PFG $12.8 million
RJ O'Brien $91 million
  • #622
  • Jan 23, 2008 7:05pm Jan 23, 2008 7:05pm
Awwww.... no "dead pool" list? Maybe starting in Feb? ;-) heh heh
  • #623
  • Jan 24, 2008 1:11pm Jan 24, 2008 1:11pm
and i wonder how many of those are including bonds with the bank of Mickey Mouse?

But hey dont worry the NFA will get round to them eventually!!
  • #624
  • Jan 24, 2008 1:15pm Jan 24, 2008 1:15pm
Quoting Pip Hunter E
Awwww.... no "dead pool" list? Maybe starting in Feb? ;-) heh heh
Heh, I guess too many comapnies survived from his last PR Dead List campaign to try it again.

My comments on this:
Quoting Vensik
I've said it before and I will say it again. It must be nice as a larger firm to have the NFA as your lapdog to shut down your competition without directly having to compete them out of the market.

What happened to free market? Capitalism? Due diligence? The NFA continuing to shut down smaller brokers based only on their capital is pretty disgusting in my opinion. Regulating the market and enforcing compliance issues is one thing, that would protect the consumer. Forcing brokerages that would rather spend their money on better technology and customer service vs making profit off customers and putting it in the bank is ridiculous. This is not to protect the traders; this is only to benefit the larger brokerages. Period.

The NFA has already stated they would like to ban IB's all together. I believe the IB portion is a precursor to doing just that. Why? IB's give individual traders clout against the bigger brokerages. Being an individual with 5k dollars doesn't give the larger brokerages any reason to fix their errors or provide good customer/tech support. Being an individual with 5k behind an IB worth 700k to the broker provides the client much more power. That is what IB's are there for, to fight the broker and force them to fix their mistakes. Forcing competition out of the market is only going to Increase the need for IB's, that is why the larger brokerages are commanding their NFA to get rid of them now vs later.
From This post.
The basis of a democratic state is liberty. ~ Aristotle
  • #625
  • Jan 24, 2008 3:06pm Jan 24, 2008 3:06pm
Here comes the unregistered IB fine’s, IFX gets hit for IB advertising,

http://www.nfa.futures.org/BasicNet/...01&contrib=NFA
\
  • #626
  • Jan 24, 2008 3:12pm Jan 24, 2008 3:12pm
Quoting KasperFX
Here comes the unregistered IB fine’s, IFX gets hit for IB advertising,

http://www.nfa.futures.org/BasicNet/...01&contrib=NFA
\
KasperFX ~

Anyone can get fined for misleading information - happens all the time. It just happen to be an IB in this case....btw it's IFXs responsibility to review their IB's websites.
  • #627
  • Jan 31, 2008 3:08pm Jan 31, 2008 3:08pm
Advanced Markets just got nailed for shoddy book keeping. Here is the the NFA's official statement:

Quote
NFA fines Charlotte forex firm, Advanced Markets, Inc., and its principals $150,000

January 30, Chicago - National Futures Association (NFA) has ordered Advanced Markets, Inc. (AMI) and its principals, Anthony P. Brocco and Geoffrey Gooch, to jointly pay a fine of $150,000. AMI is a Futures Commission Merchant and a Forex Dealer Member located in Charlotte, North Carolina. The Decision, issued by an NFA Hearing Panel, is based on a Complaint filed in June 2007 and a settlement offer submitted by AMI, Brocco and Gooch.

The Panel found that Brocco and Gooch failed to diligently supervise the firm's financial and recordkeeping activities and the promotional materials used by AMI's unregistered solicitors.
  • #628
  • Feb 1, 2008 2:32pm Feb 1, 2008 2:32pm
2007 was a year of change in the forex industry, most of it for the better as some of the seedist firms in the industry were shown the door thanks to the NFA’s capital requirement increase. But 2008 appears to be an even more momentous year of change for the U.S. forex industry. And those changes may not necessarily be for the better.

The Savior has long been an advocate of healthy capitalization in the industry. But the recent legislation set to pass in the Congress should be a cause for serious concern for all forex traders. The last few weeks I have received numerous emails and done some research through helpful links provided on the bulletin boards and have come to the realization that this legislation is not good for the trading public.

Wha? I know, I know. The Savior has been preaching the virtues of high capitalization so in theory he should support increasing capitalization to $20 million right? And in fact at first I was sympathetic to this proposal. But the bottom line is the Savior is also a trader. And as a trader I am worried that by restricting this industry to just a handful of the larger players (FXCM, GFT, Gain, Oanda) that speads will once again widen. Take FXCM for example. Their spreads have been tightening for the past year in response to the increased competition taking place in the marketplace. But what happens if that competition gets eliminated altogether? How does this affect the average trader?

The $5 million rule needed to be put into place. There were too many tiny bucketshops doing serious damage to traders. Even now I still have my suspicions about tiny little outfits like AMIFX who are barely treading water even after the $5 million requirement.

Nevertheless, with the House already passing a law to require that all firms have a minimum $20 million on hand (and who knows what other capital requirements will be imposed upon the industry) the barrier to entry is getting sky high and few firms are going to be able to make the cut. My understanding is that the Senate has not approved the House’s language. So there may still be a chance to stop this law from passing.

Also it appears that introducing brokers are going to be wiped out entirely. There are a bunch of registration requirements that may very well strangle most introducing brokers and put them out of business.

I don’t think people realize just how perilous the situation is. This could all become law in a month’s time. Traders, brokers and medium sized dealers should call their Congressman right away. It seems Congress is only hearing from the regulators, not the general public. As a trader I want a healthy industry with stable, well capitalized firms. But I also want good service and tight spreads. Having only 6 firms in the industry is not going to guarantee either.
  • #629
  • Feb 2, 2008 4:16am Feb 2, 2008 4:16am
Well bud, I'm not sure what to think just yet. I've openly questioned if you haven't been grinding this axe on behalf of a deal desk that you are either employed by, or an ultra-fanboy of. More recently you've seemed to speak on a more balanced level, but after reading this, I am again suspicious.

The reality that stands to protect traders in all of this, is hand-off to CFTC oversight. While the NFA slaps a fine here or there, the CFTC has real teeth. I can't see a deal desk getting away with price manipulation (for the ones whom traders say are doing this) much longer, and all in all, that has very little to do with a higher net cap requirement and everything to do with real governance.

So, have the deal desks decided that CFTC oversight is their undoing, and as such, now your trying to drum up resistance to that under the guise of competition concern? Or are you honest on your concern? The world may never know, but I do see you missing the biggest issue here, and it's CFTC oversight, not another net cap increase. CFTC oversight changes EVERYTHING.

Time will tell, and if I have misjudged you, I apologize, but I do say you are missing the bigger issue.
  • #630
  • Feb 3, 2008 11:23pm Feb 3, 2008 11:23pm
Quoting Pip Hunter E
Well bud, I'm not sure what to think just yet. I've openly questioned if you haven't been grinding this axe on behalf of a deal desk that you are either employed by, or an ultra-fanboy of. More recently you've seemed to speak on a more balanced level, but after reading this, I am again suspicious.

The reality that stands to protect traders in all of this, is hand-off to CFTC oversight. While the NFA slaps a fine here or there, the CFTC has real teeth. I can't see a deal desk getting away with price manipulation (for the ones whom traders say are doing this) much longer, and all in all, that has very little to do with a higher net cap requirement and everything to do with real governance.

So, have the deal desks decided that CFTC oversight is their undoing, and as such, now your trying to drum up resistance to that under the guise of competition concern? Or are you honest on your concern? The world may never know, but I do see you missing the biggest issue here, and it's CFTC oversight, not another net cap increase. CFTC oversight changes EVERYTHING.

Time will tell, and if I have misjudged you, I apologize, but I do say you are missing the bigger issue.

Pip Hunter I think your on the right track here, looks like someone's trying to back track maybe because the firm he once started all the chatter for may not qualify under his new Bill. this new bill is something everyone needs
  • #631
  • Feb 4, 2008 1:30am Feb 4, 2008 1:30am
Quoting forexsavior
2007 was a year of change in the forex industry, most of it for the better as some of the seedist firms in the industry were shown the door thanks to the NFA’s capital requirement increase. But 2008 appears to be an even more momentous year of change for the U.S. forex industry. And those changes may not necessarily be for the better.

The Savior has long been an advocate of healthy capitalization in the industry. But the recent legislation set to pass in the Congress should be a cause for serious concern for all forex traders. The last few weeks I have received numerous emails and done some research through helpful links provided on the bulletin boards and have come to the realization that this legislation is not good for the trading public.

Wha? I know, I know. The Savior has been preaching the virtues of high capitalization so in theory he should support increasing capitalization to $20 million right? And in fact at first I was sympathetic to this proposal. But the bottom line is the Savior is also a trader. And as a trader I am worried that by restricting this industry to just a handful of the larger players (FXCM, GFT, Gain, Oanda) that speads will once again widen. Take FXCM for example. Their spreads have been tightening for the past year in response to the increased competition taking place in the marketplace. But what happens if that competition gets eliminated altogether? How does this affect the average trader?

The $5 million rule needed to be put into place. There were too many tiny bucketshops doing serious damage to traders. Even now I still have my suspicions about tiny little outfits like AMIFX who are barely treading water even after the $5 million requirement.

Nevertheless, with the House already passing a law to require that all firms have a minimum $20 million on hand (and who knows what other capital requirements will be imposed upon the industry) the barrier to entry is getting sky high and few firms are going to be able to make the cut. My understanding is that the Senate has not approved the House’s language. So there may still be a chance to stop this law from passing.

Also it appears that introducing brokers are going to be wiped out entirely. There are a bunch of registration requirements that may very well strangle most introducing brokers and put them out of business.

I don’t think people realize just how perilous the situation is. This could all become law in a month’s time. Traders, brokers and medium sized dealers should call their Congressman right away. It seems Congress is only hearing from the regulators, not the general public. As a trader I want a healthy industry with stable, well capitalized firms. But I also want good service and tight spreads. Having only 6 firms in the industry is not going to guarantee either.
I seem to be reading this same old argument “the new bill will, increase spreads, give the big guys a monopoly in nothing but rubbish, don’t be fooled these guys are nothing but hired guns “blogers” to spread the propaganda over the forums. it’s nothing but a propaganda campaign to get traders thinking this new bill / law will do them harm, on the contrary the bill is going into effect to help the traders and the industry by riding us of undercapitalized, shabby book keeping, commingling of our funds, sneaky tactics bucked shops, and yes no mater how much they have under cap 10, 20 even 100m I still consider a sol FX FCM to still be a bucket shop ( read http://www.nfa.futures.org/news/news...ArticleID=1968 ) the key here is regulations, at present structure sol FX FCM’s are exempt or limited form many of the laws set emplace to protect the public and that’s how many of the remaining Big FX firms would like it to stay.

You should start seeing a lot of this propaganda over the forums do to the fact that all FX firms have recently learned is that even with there 50 to 100m caps may still not fit into this new FX FCM qualification after all so their trying like the dickens to keep their money trees alive. I say let them die, thay have done nothing but rape and pillage us for years now that them get what’s coming, theirs much stronger regulated, save fair dealers just waiting for this all to happen. Please refer to this thread to learn more http://www.forexfactory.com/showthread.php?t=66052
  • #632
  • Feb 4, 2008 11:19am Feb 4, 2008 11:19am
My issue with the legislation is not the oversight of the CFTC. I welcome the CFTC's oversight. I welcome CFTC rule making and hope they can put in stringent rules on order execution. My issue is the narrowing of the field by the government.
  • #633
  • Feb 4, 2008 11:24am Feb 4, 2008 11:24am
Should the Congress pass legislation requiring all firms have a minimum net capital requirement of $20 million the following firms will be in danger in the United States:

Advanced Markets $1.3 million
Alpari $6.4 million
Bacera $3.1 million
CMC $2.7 million
CMS $11.4 million
Easy Forex $7 million
Forex Club $4.8 million
Friedberg Mercantile $7.9 million
GFS Futures & Forex $3.6 million
Hotspot $6.1 million
IFX $17.1 million
Ikon $9.1 million
MB Trading $6.6 million
Money Garden $5.3 million
ODL $13 million
PFG $12.8 million

Now, many of these firms have additional capital they can infuse into their firms (particularly foreign firms like IFX and CMC as well as domestic ones like Hotspot.) But many do not. The customers of these firms should take notice, and if you want to keep trading with these firms, take action.
  • #634
  • Edited 12:13pm Feb 4, 2008 11:37am | Edited 12:13pm
Quoting KasperFX

You should start seeing a lot of this propaganda over the forums do to the fact that all FX firms have recently learned is that even with there 50 to 100m caps may still not fit into this new FX FCM qualification after all so their trying like the dickens to keep their money trees alive. I say let them die, thay have done nothing but rape and pillage us for years now that them get what’s coming, theirs much stronger regulated, save fair dealers just waiting for this all to happen. Please refer to this thread to learn more http://www.forexfactory.com/showthread.php?t=66052
Dude, you have some serious issues. I think that a company must have whomped you but good at one point, because you're so hellbent on saying that anyone who disagrees with you is a fraud and that every broker has been trying to rip you off. No offense, but that's YOUR PERSONAL EXPERIENCE - I haven't see that kind of fraud personally. That doesn't mean my case is the norm, but it does mean you need to get a hold on your personal perspective and realize it doesn't indict every single firm out there. It doesn't mean that every firm is out there trying to rip you off, and I take offense to the point that if I disagree with you, I'm an industry plant or a moron (which is basically what you have suggested)

Some of the smaller companies could be fraudulent, but I just don't believe that all of those smaller forex companies are fraudulent - I don't even think a majority of them are. You apparently think differently.

I find nothing good about narrowing the field when we JUST HAD a narrowing by the 5 million cap. My opinion is we should see what the effects of the 5 million cap are before we immediately throw out another reg (20 million) for them to meet. That has nothing to do with CFTC oversight... I just don't like the idea that at the end of the day, we'll have maybe 7 huge brokers backed by a bank, and that's essentially it. What motivation will those companies have to innovate? It will be the textbook case of an oligopoly, and you have had no answers for that point. No new companies will even bother to enter this field - what would be the point? So that the "big 7" or so can kill them off by raising the line again for them to make sure they can't make it?

Please note - this doesn't mean that the CFTC having oversight is a bad thing - it just means I'm skeptical that they gave the five million "mark" a fair chance if they're plotting to change it this quickly.
  • #635
  • Feb 4, 2008 11:41am Feb 4, 2008 11:41am
Quoting forexsavior
My issue with the legislation is not the oversight of the CFTC. I welcome the CFTC's oversight. I welcome CFTC rule making and hope they can put in stringent rules on order execution. My issue is the narrowing of the field by the government.
The irony is that we've come full circle and I agree with you on the narrowing-of-the-field issue.
  • #636
  • Feb 4, 2008 1:21pm Feb 4, 2008 1:21pm
Quoting forexsavior
Should the Congress pass legislation requiring all firms have a minimum net capital requirement of $20 million the following firms will be in danger in the United States:

Advanced Markets $1.3 million
Alpari $6.4 million
Bacera $3.1 million
CMC $2.7 million
CMS $11.4 million
Easy Forex $7 million
Forex Club $4.8 million
Friedberg Mercantile $7.9 million
GFS Futures & Forex $3.6 million
Hotspot $6.1 million
IFX $17.1 million
Ikon $9.1 million
MB Trading $6.6 million
Money Garden $5.3 million
ODL $13 million
PFG $12.8 million

Now, many of these firms have additional capital they can infuse into their firms (particularly foreign firms like IFX and CMC as well as domestic ones like Hotspot.) But many do not. The customers of these firms should take notice, and if you want to keep trading with these firms, take action.
HA! So we have the new "dead pool" eh? We caling it "in danger" this time around? Right, because this time you "don't agree" with the increase.

Well bud, Knight Capital owns Hotspot. Of course you know that as resident expert, yes? The chance of HS sinking is about as good as you admitting who you work for I'd say... lolz. This thread is a joke. I'm going to stop giving it air play, and discuss the issues which matter to REAL traders over in Moe's thread. Laterz.
  • #637
  • Feb 4, 2008 4:23pm Feb 4, 2008 4:23pm
Quoting Pip Hunter E
This thread is a joke. I'm going to stop giving it air play, and discuss the issues which matter to REAL traders over in Moe's thread. Laterz.
oh please, you'll be back piphunter...
  • #638
  • Feb 12, 2008 11:41am Feb 12, 2008 11:41am
Just a quick notification.

Selected FCM financial data as of December 31, 2007 (from reports filed by January 31, 2008) is now available.

cheers
  • #639
  • Feb 13, 2008 9:45am Feb 13, 2008 9:45am
The CFTC has finally released the December 2007 net capital numbers. This is our first look at the forex industry after the increase in capital requirements to $5 million in the United States.

I'm amazed that firms like Advanced Markets and Bacera made the cut, although judging from their paltry capital numbers they are barely treading water. In light of the One World and FXLQ fiascos I would view those cap numbers with extreme skepticism. These are not safe firms in my opinion.

An interesting piece of data as well is the number InterbankFX is now reporting. Their cap number has dropped dramatically from $30 million to $19.2 million in one month. Often times cap increases and decreases can be written off as being part of the forex business cycle. But the fact is over that same period of time the FXLQ scandal ruptured and it turns out Interbank had some $10 million stashed away at FXLQ. Something to keep an eye on here people. http://www.robbevans.com/pdf/forexlqreport01.pdf

Here is the full run down of net capital per firm. Remember the Congress is close to passing a law which would require firms to have a minimum of $20 million to stay in business. Should it pass the industry may only have about a dozen firms left.

The Big Six (Above $20 Million)
1. Oanda $156 million
2. RJ O'Brien $92 million
3. FXCM $75 million
4. GFT $69 million
5. Gain Capital $50 million
6. I Trade FX $34 million

Below $20 Million
7. PFG $19.7 million
8. Interbank FX $19.2 million
9. FX Solutions $17.9 million
10. IFX $15.5 million
11. CMS $13.8 million
12. GFS Futures & Forex $10.2 million
13. CMC $8.7 million
14. Alpari $8 million
15. Ikon $7.9 million
16. Easy Forex $7.6 million
17. Friedberg Mercantile $7.5 million
18. Forex Club $7.4 million
19. MB Trading $7 million
20. ODL $6.9 million
21. Hotspot $6.1 million
22. Money Garden $6 million
23. Bacera $5.4 million
24. Advanced Markets $5.2 million
  • #640
  • Feb 13, 2008 11:04am Feb 13, 2008 11:04am
Quoting forexsavior
The CFTC has finally released the December 2007 net capital numbers. This is our first look at the forex industry after the increase in capital requirements to $5 million in the United States.

I'm amazed that firms like Advanced Markets and Bacera made the cut, although judging from their paltry capital numbers they are barely treading water. In light of the One World and FXLQ fiascos I would view those cap numbers with extreme skepticism. These are not safe firms in my opinion.

An interesting piece of data as well is the number InterbankFX is now reporting. Their cap number has dropped dramatically from $30 million to $19.2 million in one month. Often times cap increases and decreases can be written off as being part of the forex business cycle. But the fact is over that same period of time the FXLQ scandal ruptured and it turns out Interbank had some $10 million stashed away at FXLQ. Something to keep an eye on here people. http://www.robbevans.com/pdf/forexlqreport01.pdf

Here is the full run down of net capital per firm. Remember the Congress is close to passing a law which would require firms to have a minimum of $20 million to stay in business. Should it pass the industry may only have about a dozen firms left.

The Big Six (Above $20 Million)
1. Oanda $156 million
2. RJ O'Brien $92 million
3. FXCM $75 million
4. GFT $69 million
5. Gain Capital $50 million
6. I Trade FX $34 million

Below $20 Million
7. PFG $19.7 million
8. Interbank FX $19.2 million
9. FX Solutions $17.9 million
10. IFX $15.5 million
11. CMS $13.8 million
12. GFS Futures & Forex $10.2 million
13. CMC $8.7 million
14. Alpari $8 million
15. Ikon $7.9 million
16. Easy Forex $7.6 million
17. Friedberg Mercantile $7.5 million
18. Forex Club $7.4 million
19. MB Trading $7 million
20. ODL $6.9 million
21. Hotspot $6.1 million
22. Money Garden $6 million
23. Bacera $5.4 million
24. Advanced Markets $5.2 million
Welcome back!! i missed you
2 traders viewing now