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Proposed NFA Capital Requirement

  • #681
  • Apr 11, 2008 4:23pm Apr 11, 2008 4:23pm
with this new swiss law will this make swiss brokers more safer then u.s. brokers, this may also explain migfx countdown to there new service.
If I Go Broke Trying Then I Will die happy.
  • #682
  • Apr 11, 2008 5:37pm Apr 11, 2008 5:37pm
Quoting Moe
with this new swiss law will this make swiss brokers more safer then u.s. brokers, this may also explain migfx countdown to there new service.
It's hard to say based on a quick reading how "safe" they are compared to US Brokers. They say that they must register like a bank, but then the financial requirements seem to be similar to NFA Net Cap requirements. My guess is that its about on par with NFA regulations, which is still a substantial improvement.

The structural requirements are hard to evaluate without seeing the penalties for non-compliance with those factors, but at first glance, they COULD be better. My question regards who is going to do regular checks on this stuff. Who will check to see that those organizational structure separations are upheld? Once we see some Swiss procedures on inspections, we'll be better able to tell.
  • #683
  • Apr 11, 2008 5:50pm Apr 11, 2008 5:50pm
Moe has right, cause with a swiss banking license funds are insured like a bank account (30k Chf) in case of bankrupt

instead US brokers even well capitalized and with future 20mln capital requirement don't have funds insured like bank's deposits.

NFA, please insted of raise capitalization requirement, ask US brokers for banking license like The Swiss Federal Banking Commission (SFBC)
  • #684
  • Apr 11, 2008 6:34pm Apr 11, 2008 6:34pm
Quoting FedePresident
Moe has right, cause with a swiss banking license funds are insured like a bank account (30k Chf) in case of bankrupt

instead US brokers even well capitalized and with future 20mln capital requirement don't have funds insured like bank's deposits.

NFA, please insted of raise capitalization requirement, ask US brokers for banking license like The Swiss Federal Banking Commission (SFBC)
we know banking in swiss is top of the line, if they regulate forex brokers like they do there banks then swiss wins hands down.
If I Go Broke Trying Then I Will die happy.
  • #685
  • Edited 2:41am Apr 12, 2008 2:24am | Edited 2:41am
Quoting FedePresident
Moe has right, cause with a swiss banking license funds are insured like a bank account (30k Chf) in case of bankrupt

instead US brokers even well capitalized and with future 20mln capital requirement don't have funds insured like bank's deposits.

NFA, please insted of raise capitalization requirement, ask US brokers for banking license like The Swiss Federal Banking Commission (SFBC)
Swiss banks are insured to roughly $30,000. I guess that's fine for most individual traders, although I'm not familiar with Swiss banking laws to know what happens above that amount. The bit on Swiss banking laws that was posted (the English link) didn't go into the legalities of what happens if the firm doesn't have 4 billion in assets other than to say "they're be distributed proportionally", although I guess 4 billion is more than most brokers have in client accounts. I guess the pay-in is at least 9 million.

The article says this will wipe out most of the brokers in Switzerland. I'm still going to stand on my "wait to see what current effects regulations have here" opinion before using the nuclear option. (I'm sure that will bring out the calls of how I'm some horrible person trying to steal people's money). There are a lot of trading and investing options in the U.S. that don't require the company to become a bank, and I'm wary of nuking the firms here as the next step before seeing what effect a 5 million net cap has - then possibly a 20 million.

That said, guaranteed insurance is nicer than having no guarantee.

"we know banking in swiss is top of the line,"

Huh? "We" (as in you and I) know they're good for locking away bank funds to protect them from outside sources (hence the jokes about "I have my hidden funds in my Swiss bank account"), but do we know that banking in Switzerland is say, superior to banking in Germany? The U.S.? I *suspect* that they could be, but then again, I haven't opened a Swiss bank account.

It's an interesting bit of law. I personally still wouldn't necessarily rush to open a Swiss account... Others might though, and there is some assurance there, although the devil is in the details. I'm sure it will grab some attention though, as it rightfully should.
  • #686
  • Apr 14, 2008 4:40pm Apr 14, 2008 4:40pm
There is great deal of uncertainty in the Swiss Forex Dealer community right now. There is no way of knowing which firms are here to stay and which firms are collecting coins in preparation for their crossing of the river Styx. I have emailed all the major Swiss firms to try and find out if each firm plans on getting a banking license. The responses (or lack thereof) have been quite illuminating.

As such I'm starting a Swiss Dealer Dead Pool to keep the trading public updated and informed about what is going on in Switzerland.

Firms that announced they are applying for a banking license
These firms have confirmed they plan on getting a banking license.

1) ACM
2) Fibo Group
3) Crown Forex

Firms that are fleeing Swiss Regulation
These firms have stated they are registered offshore and don't need to register.

1) Masterforex. Their business office is listed in Switzerland but they are registered in the Seychelles and have stated they do not need to get a banking license.
2) forex-swiss. FXCH, despite the fact they are NAMED "Forex Swiss" claim registration in Dominica. This is an odd company that has claimed multiple office addresses over the years including, Switzerland, Austria, South Africa, Iran, and the United States. Today they are claiming they have offices in Dominica and the United Kingdom. Tomorrow who knows, they could claim a mailing address in Tibet. Beware this firm.
3) Prime4X. Their head office is in Switzerland but they have stated they are applying for a license in Cyprus.

Firms that are no longer accepting customers
These firms are no longer accepting new customers.

1) WestCapFX

Firms that refuse to comment
These firms refuse to comment on the new licensing requirement thus leaving their customers completely in the dark about their future. I strongly recommend anyone who has an account with any of these firms take their money out immediately due to their lack of transparency.

1) GFX Group (Forex.CH)
2) DukasCopy
3) MIGfx
4) Swiss Direkt
5) Tadawulfx
6) Aleccohfx
7) Advised Trading

As always conduct your due diligence and make sure the firm you trade with is regulated and legit.
  • #687
  • Apr 14, 2008 5:30pm Apr 14, 2008 5:30pm
I wonder how long it'll take for the US regulatory powers-that-be to jump on the band wagon.
  • #688
  • Apr 14, 2008 5:49pm Apr 14, 2008 5:49pm
Quoting forexsavior
There is great deal of uncertainty in the Swiss Forex Dealer community right now. There is no way of knowing which firms are here to stay and which firms are collecting coins in preparation for their crossing of the river Styx. I have emailed all the major Swiss firms to try and find out if each firm plans on getting a banking license. The responses (or lack thereof) have been quite illuminating.

As such I'm starting a Swiss Dealer Dead Pool to keep the trading public updated and informed about what is going on in Switzerland.

Firms that announced they are applying for a banking license
These firms have confirmed they plan on getting a banking license.

1) ACM
2) Fibo Group
3) Crown Forex

Firms that are fleeing Swiss Regulation
These firms have stated they are registered offshore and don't need to register.

1) Masterforex. Their business office is listed in Switzerland but they are registered in the Seychelles and have stated they do not need to get a banking license.
2) forex-swiss. FXCH, despite the fact they are NAMED "Forex Swiss" claim registration in Dominica. This is an odd company that has claimed multiple office addresses over the years including, Switzerland, Austria, South Africa, Iran, and the United States. Today they are claiming they have offices in Dominica and the United Kingdom. Tomorrow who knows, they could claim a mailing address in Tibet. Beware this firm.
3) Prime4X. Their head office is in Switzerland but they have stated they are applying for a license in Cyprus.

Firms that are no longer accepting customers
These firms are no longer accepting new customers.

1) WestCapFX

Firms that refuse to comment
These firms refuse to comment on the new licensing requirement thus leaving their customers completely in the dark about their future. I strongly recommend anyone who has an account with any of these firms take their money out immediately due to their lack of transparency.

1) GFX Group (Forex.CH)
2) DukasCopy
3) MIGfx
4) Swiss Direkt
5) Tadawulfx
6) Aleccohfx
7) Advised Trading

As always conduct your due diligence and make sure the firm you trade with is regulated and legit.
i know for a fact that dukascopy and migfx would meet the new regulations, they too have apply for a banking license.
If I Go Broke Trying Then I Will die happy.
  • #689
  • Apr 14, 2008 10:51pm Apr 14, 2008 10:51pm
I was surprised to see both those firms on the "refuse to comment" list. Especially Dukas. I'd expect some kind of public announcement from them in the very near future if they are, in fact, applying for banking licenses.

Very interesting story developing.
  • #690
  • Apr 15, 2008 2:03pm Apr 15, 2008 2:03pm
Quoting opie999
I was surprised to see both those firms on the "refuse to comment" list. Especially Dukas. I'd expect some kind of public announcement from them in the very near future if they are, in fact, applying for banking licenses.

Very interesting story developing.
Dukas and MIG have not answered my email. It could be they just have really bad customer service. Or it could be that they do not want to answer my questions. Either way I'm not willing to give either firm the benefit of the doubt as a result. But if I see them state something publically I'll update accordingly.
  • #691
  • Apr 15, 2008 2:44pm Apr 15, 2008 2:44pm
Quoting forexsavior
Dukas and MIG have not answered my email. It could be they just have really bad customer service. Or it could be that they do not want to answer my questions. Either way I'm not willing to give either firm the benefit of the doubt as a result. But if I see them state something publically I'll update accordingly.
give them a call and they will tell you all about it, you can't rely on email, try calling it works better.
If I Go Broke Trying Then I Will die happy.
  • #692
  • Apr 15, 2008 3:25pm Apr 15, 2008 3:25pm
Quote
Dukas and MIG have not answered my email.

Oh yes you're right they have not replied or your email got lost so it automatically means they refused to comment.

You seem to think that an email is the best way to get official and reliable information, to then be able to post it on 34 different Forex forums. Especially since the customer service rep working at 6$/hr will surely have first hand and accurate details about the decision his broker took regarding the situation.

At the price you're getting paid for your scare tactics campaign I think you could do a bit better in terms of research...
  • #693
  • Apr 15, 2008 4:44pm Apr 15, 2008 4:44pm
Quoting forexsavior
6) Aleccohfx
Based on the thread they have on forex tsd, I thought this was a ghost broker, a broker simulation game, a pure and simple mouse trap... Does including in this list mean they are real? A real scam, that's what I think they are. Nothing more than this.
  • #694
  • Apr 16, 2008 3:59pm Apr 16, 2008 3:59pm
Quoting Jairo
Based on the thread they have on forex tsd, I thought this was a ghost broker, a broker simulation game, a pure and simple mouse trap... Does including in this list mean they are real? A real scam, that's what I think they are. Nothing more than this.
I don't know much about them except that I see them advertise regularly so I decided to include them. But I'm certainly not recommending these guys (especially since they couldn't bother replying to my email.) there are plenty of brokers out there so I wouldn't sweat considering them.
  • #695
  • Apr 16, 2008 4:07pm Apr 16, 2008 4:07pm
Quoting jimba
Oh yes you're right they have not replied or your email got lost so it automatically means they refused to comment.

You seem to think that an email is the best way to get official and reliable information, to then be able to post it on 34 different Forex forums. Especially since the customer service rep working at 6$/hr will surely have first hand and accurate details about the decision his broker took regarding the situation.

At the price you're getting paid for your scare tactics campaign I think you could do a bit better in terms of research...
Oh quit your bellyaching Jimba. These firms conduct millions of dollars worth of sales online, they are a dot.com, no excuse for not answering my emails. ACM got back to me within hours. And I'm not spending my hard earned cash on long distance calls. In any case I'll try them again in a few days. But that's a warning sign in any case that if a firm's customer service is poor its trade execution isn't likely to be much better.
  • #696
  • Apr 16, 2008 4:14pm Apr 16, 2008 4:14pm
Just confirmed with MIG by their chat they are applying for a license. that makes four confirmations to date.
  • #697
  • Apr 16, 2008 4:45pm Apr 16, 2008 4:45pm
Over the last few years an increasing number of forex firms have been popping up in Cyprus. It appears the Cypriotic authorities are taking notice and have begun to clamp down on rogue forex dealers. Recently The Cyprus Securities and Exchange Commission put out two separate warnings on forex dealers:

http://www.cysec.gov.cy/warnings_en.aspx


Note the second warning is in reference to Northfinance. This warning was put out last summer. Since then Northfinance has stopped accepting new customers as per this widely circulated chat in which they claim they are experiencing "server overload."
http://www.forexfactory.com/showthread.php?t=80044

Quote
NorthFinance Support Team: Hello, My name is Anthony.
NorthFinance Support Team: May I please have your name and North Finance Account Number?
you: hello, my name is (edited)
NorthFinance Support Team: How may I help you?
you: i just want to ask regarding news that i heard, that NF is changing to EURO ORIENT SECURITIES AND FINANCIAL SERVICES LTD.
you: is it true ? and what are the impact to all customer ?
NorthFinance Support Team: Due to the unexpected growth, our trading platform for both REAL and DEMO accounts reached its maximum capacity and the addition of new clients might jeopardize the performance of the platform itself. Therefore, we have decided not to accept new clients on our NF platform to avoid any possible inconvenience or system delays that might be caused and affect existing users. Currently, we are evaluating various options on how to upgrade our platform in order to be able to accept more clients in the near future.
NorthFinance Support Team: To ensure the bests interests of our existing clients and yours as a potential client, we decided to operate as a Master Introducer referring all new clients to FxPro for execution of their trades in Forex and CFDs. This is a European regulated broker with better terms and conditions. More information on FxPro can be found below or by visiting
NorthFinance Support Team: FxPro
NorthFinance Support Team: Existing clients can still enjoy all the benefits of using North Finance
you: so, it is the same company. but not automatically become fxpro member. right ? need to register again, right ?
NorthFinance Support Team: Due to the overwhelming success of North Finance, we have experience incredible growth, and to avoid reaching maximum capacity North Finance will not be accepting any new registrations directly on the North Finance platform
NorthFinance Support Team: It is not the same company, however North Finance does recommend FXPro for new clients
NorthFinance Support Team: North Finance will operate as a Master Introducer referring all new clients to FxPro
NorthFinance Support Team: You can create an FXPro account directly on their website if you wish Sir
NorthFinance Support Team: and you can also continue trading with your current North Finance account.
NorthFinance Support Team: FxPro does differ to North Finance, and FxPro is a European regulated broker with better terms and conditions.
NorthFinance Support Team: You do not automatically become a member of FxPro. You would need to register on the FxPro website
NorthFinance Support Team: You would also be able to withdraw your funds from your North Finance account to your FxPro account if you so wished.
NorthFinance Support Team: You can also to continue trading with your North Finance account as it is if you wish sir
you: oh ... i see. ok, thank you very much for the explanation. good bye.
NorthFinance Support Team: You're welcome
NorthFinance Support Team: Thank you for the chat, Bye for now!

Who is FX Pro? They are the same company that West Cap FX is now referring customers to since the new banking regs got passed in Switzerland. So it appears FX Pro is cleaning up nicely as a result of the increased level of scrutiny for forex dealers.

FX Pro is regulated in Cyprus by the Cyprus Securities & Exchange Commission. In fact, you can check the regulatory status of any Cyprus based broker by going to the Cyprus SEC's website here:
http://www.cysec.gov.cy/licence_members_1_en.aspx

You'll see FX Pro (under Euro Orient) and other firms such as Easy Forex and Windsor Brokers. This is verification that the firm is registered. I can't speak for the quality of regulation that Cyrpus provides but clearly any firm that is not registered here with their own license number should be avoided if they are claiming a residence in Cyprus. I see that Northfinance never had such a license number. Is it a coincidence then that they are no longer accepting new customers? I guess we'll never know for sure...
  • #698
  • Apr 17, 2008 9:12am Apr 17, 2008 9:12am
FX Savior

It’s clear that you have some really strong feelings and reasons for the NFA and regulation issues. I think a lot of people on here are wondering what is fueling your fire? I'm not clear on why all the endless talk of capital requirements? I mean like 200 posts on it. Is there something wrong? Did you get burned trading? Did you have a live account with one of the brokers you are so avidly telling us to avoid? What’s the key that unlocks the proverbial door?

Cheers and thanks for telling us like it is…
  • #699
  • Apr 17, 2008 11:53am Apr 17, 2008 11:53am
Quoting forextrader0
FX Savior

It’s clear that you have some really strong feelings and reasons for the NFA and regulation issues. I think a lot of people on here are wondering what is fueling your fire?
I was burned by a busted broker many moons ago.
  • #700
  • Apr 17, 2008 11:53am Apr 17, 2008 11:53am
Regulation can’t come soon enough to Switzerland . Yet another Swiss Forex Broker is going through its death throes right now. After posting my Swiss Dealer Dead Pool a reader told me that one of the firms on my list, Aleccoh FX (naturally it was one of the firms that never responded to my email) was in dire straits and spitting up blood on a gurney over in Switzerland.

It took me a while but I eventually dug up a thread over at Forex TSD that details the whole sordid story. I will condense everything below but if you want the ugly blow by blow of how this firm has gone rigamortis click here:

http://www.forex-tsd.com/commercial-...share-175.html

Aleccoh FX is one of the many unheard of firms that use Meta Trader. Sadly, the Meta Trader community has to play Russian roulette whenever a trader picks a forex broker since most Meta Trader Brokers are merely different sized turds in the MT4 toilet bowl. Sooner or later a stable and regulated firm will offer MT4 but until then MT4 traders will have to keep pulling that trigger hoping they don’t get their heads blown off. Sadly for the traders at Aleccoh FX the chamber was full when they pulled the trigger.

So who are these guys? Well it appears this firm got started back in the spring of 2007. Someone calling themselves “Aleccoh” appeared on the popular MT4 bulletin board Forex TSD claiming that if you sent him a couple hundred bucks he’d make you 200 pips free of charge. Things just took off from there as people poured on to the thread and starting sending him money left and right.

But then things came to a crash in January of this year. Mr. Aleccoh suddenly disappeared from the board. Nobody at Aleccoh answered customer calls anymore. Rumors abounded about another firm taking over Aleccoh that goes by the creepy name of “Spacevision.” Then Aleccoh appeared again in late Feb to state he had retained legal counsel to fight Spacevision (or the Swiss Gov’t? It’s hard to tell this Aleccoh is so shady) and that he was under some kind of gag order and couldn’t reveal anymore information. Then it became public that the Swiss Government had taken over Spacevision and that Monica Favre (no relation to Brett) of the SFBC was heading up the investigation of the whole sordid affair. In short, Aleccoh had become another Tradex Swiss AG.

What this case shows is that the Swiss retail forex market is in complete chaos right now. All my warnings about doing business with Swiss brokers are coming true. The Government is rumored to be conducting over a dozen investigations of forex dealers in Switzerland . In short, sending money to Switzerland has never been so dangerous. More to come tomorrow…
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