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Proposed NFA Capital Requirement

  • #1,041
  • Dec 13, 2008 4:51am Dec 13, 2008 4:51am
Quoting Aussie
I researched this broker just for the fun of it, there is no way I would ever consider top open with an offshore pirate!

Ok, so their website claims they are SWISS but registered in Seychelles. Their website also claims that their Global HQ is in Zürich, they even give the address and a pretty picture of an impressive building. So, anyone who researches brokers based in Switzerland should know to go to www.zefix.ch, there you will find all businesses registered in the country. OOOOPS, no Masterforex, or Beaverhead...
Masterforex is Russian, based in St Petersburg. It's on their site but you need to read their bad farsi translation though.
http://www.fx-iran.com/about/company

Seychelles, swiss, russian etc.... how confusing.
  • #1,042
  • Dec 13, 2008 7:30am Dec 13, 2008 7:30am
"hegding" might be the most illogical topic ever brought up here. 1st of all being long and short the same position is not hedging. its called being flat.

A hegdge is when you use a position in one market to offset risk in a position in another market.

what is the point of buying and selling the same thing?? you are flat the market and you eliminate ALL profit potential.

PLUS brokers are always going to charge a premium on the swap. so essentially you are paying money to have no position.

THAT is why the nfa is banning it, because brokers are taking advantage of you by letting you do this.

on any real platform if you are long and short the same position you are flat. end of story.
  • #1,043
  • Dec 13, 2008 8:54am Dec 13, 2008 8:54am
  •  onu
  • | Joined Feb 2006 | Status: superior senior member | 746 Posts
"THAT is why the nfa is banning it, because brokers are taking advantage of you by letting you do this."

You are not aware that many of very successful EAs are starting every trade with a hedge position. THATs the real reason why they bann the hedging. Dont forget NFA were founded by big brokers....
Anyway, not beeing an USA citicen i m free to go to better and fair regulated places, like Australia or GB.
As long as USA authorities dont offer protected customer accounts, the FX market there is dangerous and a no go. If NFA intends to protect the customers money why dont they force the broker to hold the clients capital in real segregated accounts under the customers name???
NFA is just a slave of some market dominating big dogs.
  • #1,044
  • Dec 13, 2008 9:36am Dec 13, 2008 9:36am
Quoting onu
If NFA intends to protect the customers money why dont they force the broker to hold the clients capital in real segregated accounts under the customers name???
Bingo! This is the typical tactic of big money "regulatory" bureaucracies. Protect people from their own stupidity. In this case by preventing individuals from taking "flat" positions. Enforcing segregated accounts would eliminate much of the corruption we see in the industry far more effectively (and fairly) than the ridiculous and arbitrary net cap requirements.

Quoting onu
NFA is just a slave of some market dominating big dogs.
Bingo again!

Your post is right on the money.
  • #1,045
  • Dec 13, 2008 10:08am Dec 13, 2008 10:08am
  •  onu
  • | Joined Feb 2006 | Status: superior senior member | 746 Posts
thx for your kind words!
  • #1,046
  • Dec 13, 2008 10:24am Dec 13, 2008 10:24am
Fun facts about 'hedging' aka holding a long and short position of the same instrument at the same time:

* Its not possible in any 'real' market aside from some low-profile FX marketmakers own little world.

* Its not only not possible it is also strictly verboten (google: cross trade rules) on every regulated exchange for good reason (forbidden by the exchanges not by the regulator). Its also forbidden to do it in 2 different accounts held by the same entity.

* The NFA just called the 'hedgers' officially 'witless investors' in their draft.
  • #1,047
  • Dec 13, 2008 3:56pm Dec 13, 2008 3:56pm
[quote=onu;2416563]

You are not aware that many of very successful EAs are starting every trade with a hedge position. THATs the real reason why they bann the hedging. quote]

yea they are probably the same ones that require fixed spreads and 500:1 leverage. this is not reality its the same type of BS that reguators are trying to flush out of this industry because they are in place to take advantage of stupid people, end of story.

Maybe i am ignorant but opening oposing positions means you are FLAT... there is absolutely NO difference than not having any position at all.
  • #1,048
  • Dec 13, 2008 6:50pm Dec 13, 2008 6:50pm
  •  onu
  • | Joined Feb 2006 | Status: superior senior member | 746 Posts
u realy dont get it....
  • #1,049
  • Dec 13, 2008 7:26pm Dec 13, 2008 7:26pm
Does anyone know why FXDD is still not in the Capital list? It has been registered with NFA for a while.. but still no capital requirement data to disclose. Thx
  • #1,050
  • Dec 13, 2008 8:19pm Dec 13, 2008 8:19pm
It is because FXDD is an NFA memember but they are not yet a registered FCM... they are still pending
  • #1,051
  • Dec 13, 2008 10:30pm Dec 13, 2008 10:30pm
Hi folks:
Might be silly question but here goes. Why are there no ECN's on the capital requirement list. Are they not regulated the same way, and if they aren't how can we find out their financial condition. Thanks for your help.

Jim
  • #1,052
  • Dec 13, 2008 10:39pm Dec 13, 2008 10:39pm
MB Trading is an ECN.
  • #1,053
  • Dec 14, 2008 12:08pm Dec 14, 2008 12:08pm
Hi folks:
Sorry my bad, I was actually interested in Interactive Brokers capital numbers, I completely overlooked MB Trading on the list. Thanks

Jim
  • #1,054
  • Dec 15, 2008 6:48am Dec 15, 2008 6:48am
Quoting bigjim1958
Hi folks:
Sorry my bad, I was actually interested in Interactive Brokers capital numbers, I completely overlooked MB Trading on the list. Thanks

Jim

I have never had IB, but I had a couple of my friends complain about them. I didnt care to ask for details.
  • #1,055
  • Dec 15, 2008 8:49am Dec 15, 2008 8:49am
I can't speak for IB either but in all fairness I doubt there's a broker on the planet that hasn't had an unhappy client or two.
  • #1,056
  • Dec 15, 2008 10:09am Dec 15, 2008 10:09am
Quoting opie999
I can't speak for IB either but in all fairness I doubt there's a broker on the planet that hasn't had an unhappy client or two.
True.
  • #1,057
  • Dec 17, 2008 10:48am Dec 17, 2008 10:48am
After years of fraud and malfeasance perpetrated by Bernie Madoff style Swiss forex brokers the retail forex business in Switzerland is on the verge of going legit as all Swiss brokers must either get a banking license or close up shop. However, these changes are still months away and thus many Swiss forex brokers continue to operate without a license.

But the good news is that the legit brokers are making themselves known. MIG Investments has just issued a press release stating that they have formally submitted their banking license application to the SFBC. This is no small feat and MIG should be congratulated on taking this first step:
http://www.migfx.ch/news/press-releases/?tx_ttnews%5BpS%5D=1228086000&tx_ttnews%5BpL%5D=2678399&tx_ttnews%5Barc%5D=1&cHash=2baa9bee91

Other Swiss brokers are moving in the same direction as well. However, one broker may be hitting a road block; Crown Forex. A disturbing report over at Forex Peace Army indicates the broker appears to be having difficulties making good on customer withdrawal requests

Now it should be noted that Forex Peace Army isn’t exactly The London Times and thus this report comes with a pretty big grain of salt. Forex Factory has since dumped the thread into the recycling bin:

http://www.forexfactory.com/showthre...ex#post2412692

Crown Forex has been notified about this report and been given an opportunity to respond by Forex Factory and rest assured their response will be included on this thread once it is given. Also, Crown Forex has announced that they plan on having 15 million Francs on hand to meet the SFBC’s capital requirement according to this recent press release: http://blogs.fxstreet.com/francesc/2008/11/10/crown-forex-increases-its-share-capital/

But the numerous instances detailed in the Peace Army report about Crown Forex not making good on customer withdrawals is very troubling and something traders should be aware of.

Again, the Savior’s advice is to wait until these brokers actually gets their banking license before opening an account with any broker based in Switzerland.
  • #1,058
  • Dec 18, 2008 3:53am Dec 18, 2008 3:53am
Quoting forexsavior
But the numerous instances detailed in the Peace Army report about Crown Forex not making good on customer withdrawals is very troubling and something traders should be aware of.
Not really a surprise I must say, their 1-pip flat spreads seemed like a definite con game.
  • #1,059
  • Dec 23, 2008 1:04pm Dec 23, 2008 1:04pm
It appears the Peace Army’s muck raking was well founded in regards to Crown Forex. Kudos to Pharoah for being ahead of the curve:

http://www.forexfactory.com/showthread.php?p=2412692&highlight=crown+forex#post2412692

Swiss banking regulators have launched an investigation of Crown Forex and appointed several care takers to administer the firm’s last rites. Here is the official announcement from the SFBC (rough translation from Google):

https://www.shab.ch/shabforms/COMMON/application/applicationGrid.jsp?template=1&view=2&page=/COMMON/search/searchresultDetail.jsp

Quote
The Federal Banking Commission has appointed Laurent Winkelmann, of Geneva, Chêne-Bougeries and Philippe von Bredow, Lausanne, in Celigny responsible investigation Crown Forex SA. Laurent Windelmann and Philippe von Bredow are authorized to bind the Crown Forex SA by individual signature. It is forbidden for bodies Crown Forex SA to carry out any legal act without the agreement of the responsible investigation.

For breaking news on the investigation of Crown Forex check this thread here which recently posted an alleged letter from the SFBC regarding their investigation of Crown Forex:

http://www.forexfactory.com/showthread.php?t=139777

Quote
Dear (name omitted)

In response to our e-mail dated 16 December 2008, we would like to present to you the following information:

As already informed, the Crown Forex SA, Bassecourt has no authorization by the Swiss Federal Banking Commission (SFBC) for an activity in the financial sector in Switzerland.

To clarify the existence of the authorization requirements, in cases of suspected law violations or suspected pursuit of activities without proper authorization and in danger of insolvency, the SFBC investigators have to clarify the facts to use.

For the SFBC, acting in such cases, a superprovisional decision is available for use of an investigation officer. These investigators are charged with the investigation of the business activities of the company and are to report to the SFBC. The investigation officers are equipped with all necessary power and as such they appear in the commercial registry. They can act now on behalf of the firm. That is the case for the Crown Forex AG with superprovisional order as of 9 December 2008 (published in the Gazette on 18.12.2008) were Mr. Laurent Winkelmann, Chêne-Bougeries and Mr Philippe of Bredow, Célignym, investigators to the Crown Forex SA, were appointed.

On the basis of the report of the investigation officers the SFBC will make a decision and, where appropriate, publish it on its website. At the moment we can offer no further details. You or your contacts in the U.S. are invited to contact us again at a later stage.

Yours sincerely

Secretariat
SWISS FED. BANKING COMMISSION

I’ve said it before and I’ll say it again. DO NOT TRADE with a Swiss forex broker UNTIL they get a banking license. There are plenty of decent brokers that are regulated all around the world from Australia to the UK to the U.S. Crown Forex is just the latest example of what can happen when you trade with an unregulated broker.
  • #1,060
  • Dec 23, 2008 9:26pm Dec 23, 2008 9:26pm
After this I guess the NFA is going to push harder for the Capital Requirement and I find it logic, we traders would be more protected as it wouldn’t be so easy for someone to start this type of businesses without complying with the requirements.
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