Proposed NFA Capital Requirement

Quoting forexsavior

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With the world financial system in chaos it’s never been more important to trade with a well capitalized firm. The CFTC has just released their latest net capital figures. Not a lot of changes from the last one. Only difference is that U.S. forex dealers have 30 fewer days to make it to the coming $20 million capital requirement deadline.

http://www.cftc.gov/marketreports/financialdataforfcms/index.htm

The following firms have net capital below $10 million


MG Financial $5,393,000
Advanced Markets $6,786,000
Forex Club $7,558,000
Friedberg Mercantile $8,147,000
ACM $8,372,000
Ikon $9,544,000
Easy Forex $9,824,000
Hotspot $9,942,000

Not much change in capital for Advanced Markets, Forex Club and ACM. Swiss broker ACM still appears to be charging the proverbial machine gun nest with a butter knife. Is this firm really going to be able to put up $20 million in the coming months? Did they even know about this capital increase before they parachuted into the U.S. market? We’ll find out soon enough.

The following firms have net capital below $20 million

GFS Forex $11,451,000
MB Trading $12,767,000
ODL $14,870,000
I Trade FX $14,952,000
Alpari $15,786,000
IFX $18,623,000
FX Solutions $19,574,000

The following firms have net capital above $20 million


CMS Forex $20,199,000
PFG $21,345,000
Interbank FX $36,505,000
Gain Capital $67,906,000
GFT Forex $73,219,000
FXCM $91,840,000
Oanda $165,458,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new law going into effect in the weeks and months ahead.

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On October 29, 2008, the CFTC contacted NFA. The CFTC advised NFA that it had received a telephone call from attorney David Serepca of San Carlos California, who said that he represented an individual by the name of Chris Lee. Serepca told the CFTC that, in April 2008, Chris Lee had written a check for $500,000 to SNC Asset Management and Kenneth Lee for the purpose of investing in a fund which would trade forex. Serepca said that he and his client had met with Kenneth Lee on October 29, 2008 and were told by Kenneth Lee that Peter Son (SNC CEO) had disappeared, and that customer money was missing.

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On October 29, 2008, another principal of SNC, Young Choi – who worked at SNC’s main office in New York City – advised NFA that SNC was out of business and wished to withdraw its NFA membership....

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Based on the telephone call from SNC’s Young Choi advising NFA that SNC was out of business, as well as the information received attorney David Serepca, and which appeared in the Korea Daily newspaper article, on October 30, 2008, NFA auditors went to SNC’s main office at 40 Wall Street in New York City to inquire about Peter Son and his whereabouts and to determine if customer funds were missing. However, when NFA auditors arrived at SNC’s main office they found that it was closed and its doors locked. The auditors left a note on the door requesting that a representative of SNC contact NFA.

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Subsequently, NFA’s auditors were contacted by Young Choi, who agreed to meet with NFA’s auditors at SNC’s main offices at 40 Wall Street....

Quoting Hedgehog

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...probably never seen the inside of a brokerage...

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Quoting opie999

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I'm 99% convinced he works for a brokerage. I'm just not entirely sure which one but I have a strong suspicion.

I think this is his J-O-B so I don't give him crap like I used to. Hey, not everyone can trade for a living.

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Quoting opie999

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I'm 99% convinced he works for a brokerage. I'm just not entirely sure which one but I have a strong suspicion.

I think this is his J-O-B so I don't give him crap like I used to. Hey, not everyone can trade for a living.

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From its offices in the DIFC, GFS will work to bring its expertise in the foreign exchange market to its customers throughout the region.

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GFS has established a reputation as a global leader in commodities trading.

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Mike Leung, Director, GFS Investments (Middle East) Ltd., said: 'We are extremely proud to join the DIFC, the leading international financial centre in the region. Working in the DIFC will allow us to provide our customers throughout the Middle East access to our foreign exchange and commodities market expertise from a platform that is internationally recognised for its integrity, transparency and efficiency.'

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GFS broke the terms of its licence by placing foreign exchange trades on behalf of its clients when the company was allowed only to offer a platform for customers to place trades, according to the DFSA statement.

The trading on behalf of clients was often "unfair and unsuitable to the interests of the clients, motivated more by a desire to maximise commissions than to profit the clients," the DFSA said. "Most clients suffered financial losses as a result of this misconduct."

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Authority suspends GFS Investments

By Babu Das Augustine, Banking Editor
Published: September 08, 2008, 00:03

Dubai: The Dubai Financial Services Authority (DFSA) on Sunday slapped hefty fines and sanctions on GFS Investments (Middle East) Limited, a company that offered online trading facilities in foreign exchange and commodities.

The DFSA's action follows a detailed investigation into the business operations of GFS Investments.
GFS Investments is licensed to provide an online foreign exchange and commodities trading facility to clients who meet DFSA's required eligibility standards. Eligible investors gain direct access to that platform via unique login and password.

Under its licence, GFS Investments was not permitted to conduct the trades, but received commissions for each trade carried out by its customers. The business is therefore suitable for professional investors who have relevant market experience, but unsuitable for retail investors.

An affected customer told Gulf News yesterday that the company used different customer accounts to carry out trades for customers who were not eligible under DFSA regulations.

"The investigations determined that GFS Investments had operated outside its authorisation by conducting business with non-eligible retail clients and by itself carrying out trading in the names of clients. The DFSA took immediate steps to ensure that no further unlawful trading took place," DFSA said in a statement.

Investigation revealed that some employees of GFS Investments engaged in conduct designed to misrepresent the eligibility of clients, including the falsification of client particulars.

Following investigations, the DFSA has imposed a range of sanctions including the banning of relevant individuals for five years from the Dubai International Financial Centre (DIFC); the imposition of fines; and the compensation of relevant clients for financial losses suffered as a result of the misconduct.

"The DFSA has an important role to maintain business standards within the DIFC. The vast majority of our licensed firms take their governance and compliance responsibilities very seriously and this has helped the DIFC to quickly establish a reputation for excellence.

"We are, therefore, disappointed by the unacceptable conduct of GFS Investments," said the DFSA's Chief Executive, David Knott.

"The DFSA's intervention will also ensure that all investors who suffered financial loss as a result of the misconduct will be fully compensated," he said.

The bans imposed by DFSA prevent the individuals from performing any function in or in connection with the provision of financial services or ancillary services in or from the Dubai International Financial Centre during the designated period.

All sanctions have been recorded in enforceable undertakings made with the DFSA by GFS Investments and its relevant officers and employees.\

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Crisis meetings at CMC Markets
Toni Case - November 6, 2008

CFD specialist CMC Markets held an all-staff meeting at the Intercontinental Hotel in Sydney today at 2.30pm to put the rumours to rest once and for all. What is happening to CMC Markets?

CMC Markets' normally thundering public relations machine has suddenly gone quiet, and in its place is FD Third Person, a media agency "specialising in financial transaction support and issues and crisis management”, according to their website.

CompareShares did its best to get clarification for traders with existing accounts with CMC Markets. We put in numerous calls to internal public relations, Sydney reception, the New Zealand office and even the 1300 303 888 number and couldn't get anyone to comment. Phone calls rang out. According to FD Third Person, key staff were in meetings until late last night and again early this morning.


CMC Markets did not want to make an official announcement to the market until staff had been notified of the changes at 2.30pm today, was the official response.

It’s now official that managing director David Trew has been axed from the Group. Trew, who made headlines earlier this year when splurging on a $25 million trophy mansion in Point Piper (as reported in The Australian newspaper) is leaving the group, according to FD Third Person. And more staff cuts – “in non-client facing functions” – are scheduled for the Sydney office. CMC Markets shut its Perth office in August this year, and recently slashed Sydney staff by around 8 per cent.

Furthermore, the London head office will be taking the reins over its Antipodean businesses. CMC Markets’ business units, Sydney, New Zealand and Asia (Singapore, Hong Kong and Japan) will now report directly to London, states FD Third Person. To date, the Australian and New Zealand businesses came under the wing of former managing director Trew.

Two months ago, CompareShares reported on a series of events that had unfolded at CMC Markets, “An AVO, staff cuts and a trophy mansion – it’s all happening at CMC Markets.”

Back then, managing director David Trew denied the suggestion that staff cuts were a result of problems at CMC Markets. He insisted that further staff cuts were not anticipated.

Stay tuned - we'll keep you updated with any developments in this story.

Quoting Voldemort

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i think that alot of these smaller shops especially, have a bit of cash available but seeing as we are in the midst of a credit (liquidity, cash, whatever you want to call it) crisis its not necessarily in their best interest to have a few mil sitting on the sideline.

I really think that we're going to be suprised how many firms make it through the 20 million dollar barrier and beyond.

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Quoting pipexy

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Is there anyone who have any idea about MasterForex(Broker) they are based in Switzerland,have bank in Cyprus,regulated in Seychelles.
Do you think that its normal?
Besides,what is their capital base,or rather how do i find out?
Thanks

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