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Attachments: Proposed NFA Capital Requirement
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Proposed NFA Capital Requirement

  • #1,001
  • Nov 17, 2008 7:12am Nov 17, 2008 7:12am
What's gonna happen to non-US brokers that don't meet net capital requirement?
  • #1,002
  • Nov 17, 2008 8:45am Nov 17, 2008 8:45am
Quoting Dr.
What's gonna happen to non-US brokers that don't meet net capital requirement?
NFA regulates only the brokers in U.S.A so the new net capital requirement is only for US brokers.
  • #1,003
  • Nov 17, 2008 9:43am Nov 17, 2008 9:43am
Quoting forexsavior
[font=Times New Roman][size=3]The CFTC has just released their latest net capital figures. The big news is that everyone is doing well. Firms are seeing big jumps in net capital as forex brokers appear to be raking in the cash in this volatile market. It doesn’t appear that anyone has had difficulty clearing the $10 million hurdle judging by the fact the NFA has not closed down anyone since Halloween (although AMIFX continues to report way below the $10 million requirement although keep in mind CFTC reports lag a full month behind the current date.)...

why isnt mgforex in the list?
  • #1,004
  • Nov 17, 2008 10:21am Nov 17, 2008 10:21am
Quoting cka6c
why isnt mgforex in the list?
MGFOREX became wholly owned subsidiary of Rosenthal Collins Group (RCG).
  • #1,005
  • Nov 17, 2008 2:21pm Nov 17, 2008 2:21pm
Quoting AKforex
NFA regulates only the brokers in U.S.A so the new net capital requirement is only for US brokers.
There are a lot of international brokers in the list. ODL (UK based), Oanda (Canada) etc. They can exist in other countries even if they don't have the required net capital. What's gonna be the problem for them?
  • #1,006
  • Nov 17, 2008 7:36pm Nov 17, 2008 7:36pm
No problem for them whatsoever.

When fine well operated American brokers are forced to close shop because of arbitrary ham-handed over-regulation, some of their former clients will be looking to overseas brokers to open new accounts. The brokers you mentioned are probably gleefully rubbing their hands in anticipation.
  • #1,007
  • Nov 17, 2008 9:21pm Nov 17, 2008 9:21pm
Speaking of brokers, does anyone know why Kathy Lien and Boris S migrated to GFT (or is it Gain?) from FXCM?

(Hi, opie. You'd never guess who this is...)
Amor Fati--F. Nietzsche
  • #1,008
  • Nov 18, 2008 5:51am Nov 18, 2008 5:51am
Quoting Dr.
What's gonna happen to non-US brokers that don't meet net capital requirement?
Nothing at all. NFA membership is not required for them.

Quoting Dr.
There are a lot of international brokers in the list. ODL (UK based), Oanda (Canada) etc. They can exist in other countries even if they don't have the required net capital. What's gonna be the problem for them?
If the new NFA regulations affect them negatively, I imagine they will just close their US based offices and continue as if nothing happened in the rest of the world wherever they operate.
  • #1,009
  • Nov 20, 2008 12:14pm Nov 20, 2008 12:14pm
Last month the S.S. Saxo Bank forced hundreds of employees to walk the plank in a furious effort to keep their Danish Longship from taking on any more water amidst the financial tsunami that has engulfed CFD brokers around the world. But it is another former shipmate of Saxo that has now taken to his Somalia-like pirate ship to fire pot shots at this listing to port Viking Broker. Ahoy it’s Charles-Henri Sabet! With parrot perched on shoulder and a black eye patch in place Sabet has Saxo in his sights…

According to Euromoney Magazine in an article titled “Charles Henri Sabet Bites Back in Saxo Saga” Sabet says that he was exiled to Davey Jones locker because of a shareholder dispute, not because of an SFBC investigation of alleged insider trading.

http://www.euromoney.com/Article/2039037/ChannelPage/0/AssetCategory/16/Charles-Henri-Sabet-bites-back-in-Saxo-saga.html

Quote
“This is really about an argument between shareholders,” says Sabet. “I still own around 5% of Saxo and I was not happy with what I saw as the bank’s domestic focus. I offered to leave, but I wanted Saxo to buy my shares as was agreed when it took over Synthesis,” he adds. Sabet says that Saxo is now focused on becoming a well-known name in Denmark, including giving backing to the small, centrist Liberal Alliance political party.

So how did this investigation come about? Euromoney states:

Quote
Saxo has declined to comment on whether or not the investigation came about because it informed the regulator of an irregularity, rather than the SFBC acting because it suspected suspicious activity. But a letter from the commission makes it clear it was informed by Saxo of the issue.

So instead of paying Sabet his share of Saxo’s booty the scallywags in Denmark simply ratted him out to regulators? Shiver me timbers that’s a low thing to do to a mate. But Sabet wasn’t the only one sent to the brig.

Quote
Sabet says he is also particularly upset that his dismissal was followed by a purge of his former employees, including his chauffeur. He believes that he will be fully exonerated when the SFBC reports its findings. In the meantime he is preparing to take legal action to clear his name and to complete the deal that was agreed when he sold Synthesis Bank to Saxo in September 2007; this included the verbal agreement to purchase his remaining shares in the bank.

Yarrrgh matey, Saxo ain’t likely to depart from its treasure anytime soon. This Sabet fellow could be waiting a long time before he sees one gold doubloon from the cash strapped folks in Denmark. I reckon Sabet would have a better chance demanding ransoms from oil tanker owning Saudi princes than from a forex and cfd broker that had been spending money like a drunken sailor on shore leave prior to the financial panic.

Arrgh, Sabet best crack open a bottle of Rum and batten down the hatches cause Saxo will fight him to the last cannon ball over that 5% share. To be continued I’m sure.
  • #1,010
  • Dec 1, 2008 11:49am Dec 1, 2008 11:49am
The forex market has long been known as the Wild West of Finance due to its unregulated nature. But the frontier is being tamed and it now appears the day of the unregulated Introducing Broker is drawing to a close. While the CFTC has not yet released its new Forex Dealer rules to the public the NFA just issued a preliminary set of guidelines for all introducing brokers who are now required by law to be licensed: http://www.nfa.futures.org/compliance/forex_registration_overview.asp

Among the rules, IBs must maintain net capital of $45,000. Aside from other requirements like proficiency exams and disclosure documents the NFA is doing background checks which require finger printing:

Quote
NFA requires all individual applicants to submit fingerprint cards, which are sent to the Federal Bureau of Investigation (FBI) to determine if the applicant has a criminal record.


This should help drive some of the industry’s worst cattle rustlers out of the market and into a new line of work, like holding up banks instead...

It remains to be seen just how onerous the new rules from the CFTC will be but with the NFA releasing this guide now the CFTC shouldn’t be too far behind.
  • #1,011
  • Dec 1, 2008 12:37pm Dec 1, 2008 12:37pm
Quoting forexsavior
The forex market has long been known as the Wild West of Finance due to its unregulated nature. But the frontier is being tamed and it now appears the day of the unregulated Introducing Broker is drawing to a close. While the CFTC has not yet released its new Forex Dealer rules to the public the NFA just issued a preliminary set of guidelines for all introducing brokers who are now required by law to be licensed: [url="http://www.nfa.futures.org/compliance/forex_registration_overview.asp"][FONT=Times...
Forexsavior-

How do you think this will affect out of country IBs? In other words, could a US broker still operate with out of country IBs in the same way that they are now?
  • #1,012
  • Dec 2, 2008 3:12am Dec 2, 2008 3:12am
Quoting IndyTrader
Forexsavior-

How do you think this will affect out of country IBs? In other words, could a US broker still operate with out of country IBs in the same way that they are now?
This only affects US based brokers and US based IBs. The rest of us will just look on while 2 or 3 brokers become an uncompetitive monopoly of the US retail forex market.
  • #1,013
  • Dec 2, 2008 11:31am Dec 2, 2008 11:31am
Quoting IndyTrader
Forexsavior-

How do you think this will affect out of country IBs? In other words, could a US broker still operate with out of country IBs in the same way that they are now?
I tend to agree with Oakmonster. I don't believe IBs outside the U.S. will be affected. But we'll have to wait and see what these new rules say.
  • #1,014
  • Dec 2, 2008 1:35pm Dec 2, 2008 1:35pm
IBs based outside of the US will not be directly affected because the NFA and CFTC only have jurisdictional control over American companies. There are, however, other things they can do to make it difficult for US citizens to deal with offshore brokers. Much remains to be seen.
  • #1,015
  • Dec 4, 2008 7:53am Dec 4, 2008 7:53am
Quoting opie999
There are, however, other things they can do to make it difficult for US citizens to deal with offshore brokers. Much remains to be seen.
What can they do? Ban Americans from doing business with other countries?
  • #1,016
  • Dec 4, 2008 8:57am Dec 4, 2008 8:57am
Heheh. Well, not exactly. It would be relatively easy to impose stricter regulations on non-US brokers in order for them to conduct business in the States. Requiring a physical office and employees on US soil is the first thing that comes to mind. To give a more complete idea of what one might expect, just google "post 9-11 banking regulations".

It's a not-so-brave new world.
  • #1,017
  • Dec 5, 2008 7:08am Dec 5, 2008 7:08am
Quoting opie999
Heheh. Well, not exactly. It would be relatively easy to impose stricter regulations on non-US brokers in order for them to conduct business in the States. Requiring a physical office and employees on US soil is the first thing that comes to mind. To give a more complete idea of what one might expect, just google "post 9-11 banking regulations".

It's a not-so-brave new world.
So Americans would then be forced to deal ONLY with the 4 or 5 brokers that will be left after all this shakeup. There would be thousands of US traders complaining about the loss of freedom to choose to trade with whom they wished?
I think for many non US brokers, $20million+ (plus the cost to establish in the market) to open a US based office is a bit too much of a gamble.

What is going to stop US based traders from choosing offshore anyway?
  • #1,018
  • Dec 5, 2008 9:02am Dec 5, 2008 9:02am
Quoting oakmonster
What is going to stop US based traders from choosing offshore anyway?
Any number of things.

The NFA/CFTC, with the help of congress, could impose regulations that make it so onerous, so expensive to deal with Americans, non-US brokers will simply stop taking US citizens as clients unless they open very large accounts.

We're just speculating now but if you can imagine it, congress can enact it.
Of course, it's all done in the name of combating narcoterrorpedophilia-muslimgangmoneylaundering-expiredlibrarybooksparkingtickets. Whatever congress decides to do it will be for our own good because they know we're too f*ing stupid to make important decisions with our own money.
  • #1,019
  • Dec 6, 2008 1:28am Dec 6, 2008 1:28am
Quoting opie999
Any number of things.

The NFA/CFTC, with the help of congress, could impose regulations that make it so onerous, so expensive to deal with Americans, non-US brokers will simply stop taking US citizens as clients unless they open very large accounts.

We're just speculating now but if you can imagine it, congress can enact it.
Of course, it's all done in the name of combating narcoterrorpedophilia-muslimgangmoneylaundering-expiredlibrarybooksparkingtickets. Whatever congress decides to do it will be for our own good because they...
Doesn't this just basically mean that all of the self-regulating BS of the NFA was meant to profit the junk firms like FXCM?
  • #1,020
  • Dec 6, 2008 3:51pm Dec 6, 2008 3:51pm
Quoting IndyTrader
Doesn't this just basically mean that all of the self-regulating BS of the NFA was meant to profit the junk firms like FXCM?
Lol! There's a school of thought that strongly advocates this to be the case. At the very least there's probably a grain of truth to it.
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