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Attachments: Proposed NFA Capital Requirement
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Proposed NFA Capital Requirement

  • #1,141
  • Apr 6, 2009 7:49am Apr 6, 2009 7:49am
Quoting forextrader0
Why would Advanced markets list $19,873 million? I've never heard of them, but it would seem to make sense that they would find another $400k to get off the maybe/maybe not list.
I dont know but I am so surprised that they are not worried about forex saviors maybe/maybe not list. They only need 15M as of right now so why should the post more if they dont need it?
  • #1,142
  • Apr 6, 2009 11:41am Apr 6, 2009 11:41am
Quoting fxtrader42
They only need 15M as of right now so why should the post more if they dont need it?
So they can get listed on savior's coveted "maybe" list?
  • #1,143
  • Apr 6, 2009 12:33pm Apr 6, 2009 12:33pm
Disturbing news out of, where else; Switzerland, that the police have raided the offices of Swiss forex broker ACM for possible fraud. You’ll remember ACM fled the U.S. after they failed to come up with enough capital to stay in business. They are trying to get a banking license in Switzerland but to date only have an application pending with Swiss authorities. That application just got a lot more complicated.

Francesc at FX Street has been linking to several articles in the Swiss Press which details the investigation:
http://blogs.fxstreet.com/francesc/2009/04/06/police-raid-acm-geneva-office-in-fraud-probe-on-friday/

The main article appeared in Swisster:
http://www.swisster.ch/en/news/business/police-raid-geneva-forex-firm-in-fraud-probe_116-1451105

Quote
A squad of 28 police officers raided the downtown Geneva offices of currency trading company ACM and seized documents, a computer and other evidence in a suspected financial fraud case. Swisster discovers the unprecedented affair, being directed by an inspector and detective for the cantonal force’s financial fraud brigade, may take weeks to unravel and has involved the questioning of top officials from the company, who are refusing to comment.


28 police officers?! Sounds like the raid that took place at the end of the movie Boiler Room where a swarm of agents falls upon Vin Diesel and company.

Quote
In addition, senior officials were questioned by police, although Pulh said no-one has been arrested. A company employee told Swisster that a trader and four of the company’s senior management, including Nicholas Bang, deputy general manager and one of ACM’s founders, were contacted at their homes early Thursday and taken in for questioning.

“We are being told that it has to do with a client from two years ago based in Mexico who had lost a lot of money from the company,” the informant said. “The client was looking for documents to see if there was any misappropriation.”


ACM has countered that this mysterious Mexican plaintiff is just making it all up:
http://blogs.fxstreet.com/francesc/2009/04/06/acm-update-1-acm-feels-being-victim-to-former-client-malicious-intent/

Quote
On Thursday the 2nd of April, on the basis of counterfeit documents produced by a former client, the authorities in Geneva visited ACM’s offices.

Collaborating in a transparent and active way, ACM delivered all information required.
All elements prove ACM’s good faith and it remains clear that the company has fallen victim to a former client bent on malicious intent.

In return, ACM has lodged a complaint against this former client with accusations of blackmail, defamation and forgery of documents.


Another newspaper article that Francesc links to then goes on to explain that the Mexican plaintiff was tipped off by an ex-ACM employee about some bad pricing or something from the summer of 2008. ACM insists this rogue employee gave the Mexicans false statements which the plaintiff then used to blackmail ACM?

http://blogs.fxstreet.com/francesc/2009/04/06/acm-update-2-probes-used-in-the-accusation-of-fraud-to-be-falsified-according-to-acm/

What a mess. Not sure who to believe here. But I can’t imagine that 28 police officers would storm a business, seize computers and files, and interrogate management- all on the hearsay of one disgruntled foreigner.

Stay tuned, we may have another Crown Forex on our hands.

I’ve said it before, I’ll say it again, do not trade with a Swiss broker UNLESS they have a banking license!
  • #1,144
  • Apr 10, 2009 1:17pm Apr 10, 2009 1:17pm
The CFTC has just released their latest net capital figures. For the most part it is the same as last month’s report.

http://www.cftc.gov/marketreports/f...rfcms/index.htm

The following firms have net capital below $20 million

Easy Forex $15,267,000
MB Trading $15,449,000
GFS Forex $16,008,000
Ikkon Royal $16,310,000
I Trade FX $16,811,000
Alpari $19,563,000
Advanced Markets $19,779,000

The following firms have net capital above $20 million

Forex Club $21,536,000
PFG $26,053,000
CMS Forex $29,132,000
Interbank FX $37,816,000
FX Solutions $49,298,000
GFT Forex $84,505,000
FXCM $101,546,000
Gain Capital $105,049,000
Oanda $169,205,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new $20 million capital requirement going into effect in the months ahead.
  • #1,145
  • Apr 13, 2009 11:55am Apr 13, 2009 11:55am
The NFA has announced that two new rules have been approved by the CFTC and will take effect in the next two months.

http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=2273

Rule Number One is the bad news as it bans the practice of “hedging.”

Quote
New Compliance Rule 2-43(b) requires an FDM to offset positions in a customer account on a first-in, first-out basis, thereby prohibiting a trading practice commonly referred to as "hedging." A customer may, however, direct the FDM to offset same-size transactions even if there are older transactions of a different size. Rule 2-43(b) is effective for any positions established after May 15, 2009. Offsetting positions that were established prior to the effective date do not have to be liquidated, but once either position is closed out after May 15, it may not be reestablished as a hedge.

Rule number two is the good news, as it severely restricts a forex dealer from adjusting prices after an order has been executed.

Quote
For orders executed after June 12, 2009, Compliance Rule 2-43(a) will prohibit an FDM from adjusting executed customer orders, with two exceptions. The first exception is where the adjustment is done to settle a customer complaint in favor of the customer. The second exception is where an FDM exclusively operates a "straight-through processing" model and the liquidity provider with which it entered into the automatic offsetting position changes the price of an executed order with the FDM.
Quote


Pursuant to the new rule, an FDM that adjusts an executed customer order based on an adjustment by a liquidity provider must provide notice to the affected customer within fifteen minutes of the customer order being executed. The notice must state that the FDM intends to cancel or adjust the order and must include documentation of the price adjustment from the liquidity provider. The FDM must either cancel or adjust all customer orders executed during the same time period and in the same currency pair or option regardless of whether they were buy or sell orders. All cancellations or adjustments of executed customer orders must be reviewed and approved by a listed principal of the FDM who is also an associated person. Such review must be in writing and include the documentation from the liquidity provider, and the written review and documentation must be provided to NFA at [font=Times New Roman][size=3][color=#0000ff][email protected][/color][/size][/font]. Finally, any FDM that may elect to cancel or adjust executed customer orders based upon liquidity provider price changes must provide customers with written notice of that fact prior to the time they first engage in forex transactions.


The second rule is a huge boon to the trading public. No longer will brokers be able to just cancel winning trades from customers because of supposed “price spikes” while simultaneously allowing losing trades to get booked on those same spikes.

Over all, this is a net positive for the trading public. While the hedging rule is heavy handed, customers can always open two accounts and just go long and short in each one. But the price adjustment rule more than makes up for that. Kudos to the NFA.
  • #1,146
  • Apr 13, 2009 1:15pm Apr 13, 2009 1:15pm
looks like the brokers are actually going to have to learn how to trade now....
  • #1,147
  • Apr 13, 2009 6:04pm Apr 13, 2009 6:04pm
Quoting forexsavior
(...)While the hedging rule is heavy handed, customers can always open two accounts and just go long and short in each one. (...)
If this produces the same final result, what is the point of the stupid interference? Just makes life a bit more complicated...
  • #1,148
  • Apr 14, 2009 4:13am Apr 14, 2009 4:13am
Quoting forexsavior
The NFA has announced that two new rules have been approved by the CFTC and will take effect in the next two months.

http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=2273

Rule Number One is the bad news as it bans the practice of “hedging.”
Say goodbye to low spreads at least in US brokers. This may cause a mass exodus away from US based brokers as trading conditions become unbearable.
  • #1,149
  • Apr 14, 2009 7:51am Apr 14, 2009 7:51am
Quoting oakmonster
Say goodbye to low spreads at least in US brokers. This may cause a mass exodus away from US based brokers as trading conditions become unbearable.
I am probably moving away from USA after 3 years. Does anybody know a broker that is:

- well capitalized
- regulated outside USA (very far from NFA and CFTC claws)

and offers:

- MT4
- straight through processing
- 0.01 standard lot
- no problem with opening positions in both directions at the same time
- no problem with withdrawals?

Please I will not discuss the merits of "hedging". Thank you very much for any help.
  • #1,150
  • Apr 14, 2009 9:02am Apr 14, 2009 9:02am
I entered the CFTC site and emailed them this:

Congratulations NFA and CFTC. Thanks to Compliance Rule 2.43(b) for forex transactions, I will probably move my funds away from USA and never look back. Surely, many will do the same. You don't know what you are doing. Those stupid bureaucratic minds that created this absurd ban seem to have no clue at all about how to make money in the forex market. They try to destroy what they don't understand. Go fight FRAUD, this is your true role. Don't tell people how to trade if you don't know it by yourselves.
  • #1,151
  • Apr 15, 2009 2:52am Apr 15, 2009 2:52am
Quoting oakmonster
Say goodbye to low spreads at least in US brokers. This may cause a mass exodus away from US based brokers as trading conditions become unbearable.
A bit melodramatic, not to mention inaccurate.
  • #1,152
  • Apr 15, 2009 7:08am Apr 15, 2009 7:08am
I have given up on discussing "hedging" on forums. They are true believers and their conviction transcends the most simple calculus.
  • #1,153
  • Apr 15, 2009 8:08am Apr 15, 2009 8:08am
FXCM UK offers MT4 NDD accounts. The application is not live just yet on www.fxcm.co.uk but you can fill out the regular "spot forex" application and then send and email to [email protected] explaining that you want an MT4 account.

I hope this helps.

Jaclyn Sales
FXCM
[email protected]
______________________________________________________________


Quoting Jairo
I am probably moving away from USA after 3 years. Does anybody know a broker that is:

- well capitalized
- regulated outside USA (very far from NFA and CFTC claws)

and offers:

- MT4
- straight through processing
- 0.01 standard lot
- no problem with opening positions in both directions at the same time
- no problem with withdrawals?

Please I will not discuss the merits of "hedging". Thank you very much for any help.
  • #1,154
  • Apr 15, 2009 10:23am Apr 15, 2009 10:23am
Quoting forexsavior
The CFTC has just released their latest net capital figures. For the most part it is the same as last month’s report.

http://www.cftc.gov/marketreports/f...rfcms/index.htm

The following firms have net capital below $20 million

Above $20 Million:

Interactive broker 617,622,985
IG market 24,005,775
Vedanta - The End Of Knowledge. ~ J. Krishnamurti ~
  • #1,155
  • Apr 15, 2009 5:48pm Apr 15, 2009 5:48pm
Quoting shrike
I have given up on discussing "hedging" on forums. They are true believers and their conviction transcends the most simple calculus.
I have read carefully the NFA document. Very good and prudent reasoning. It showed me an OBVIOUS disadvantage that I hadn't thought of before: the double swap cost. But my choice for this method was just for simplicity. As strange as it may seem, it is much simpler to "hedge" than to stop out using my method. And my account balance chart shows that it works. Would it work if I didn't "hedge"? Sure! Could be almost exactly the same (in fact, a little better without hedging, because of my brilliant new discovery of the double swaps ). But, as I said, for details of the method, "hedging" is simpler. Much simpler.

P.S: the NFA reasoning about double spread is wrong. Buy + stop out + sell + take profit incurs the same spread cost of buy + "hedge" + take profit 1 + take profit 2 if the 2 entries and exits take the same price.
  • #1,156
  • Apr 15, 2009 5:55pm Apr 15, 2009 5:55pm
at the end of the day, if you are long x and short x then you have no position. technically you should not be charged anything for this because you have no position... you are flat.
  • #1,157
  • Apr 15, 2009 5:56pm Apr 15, 2009 5:56pm
Quoting jsales
FXCM UK offers MT4 NDD accounts. The application is not live just yet on www.fxcm.co.uk but you can fill out the regular "spot forex" application and then send and email to [email protected] explaining that you want an MT4 account.

I hope this helps.

Jaclyn Sales
FXCM
[email protected]
______________________________________________________________
Thank you Jaclyn, I will take a look at FXCM.
  • #1,158
  • Apr 15, 2009 5:59pm Apr 15, 2009 5:59pm
Quoting Voldemort
at the end of the day, if you are long x and short x then you have no position. technically you should not be charged anything for this because you have no position... you are flat.
The market is charging you for holding 2 open contracts...
  • #1,159
  • Apr 15, 2009 9:25pm Apr 15, 2009 9:25pm
yes but you are flat... what do you think happens when you "close" a long (buy) position???? in this case "close" = "sell"
  • #1,160
  • Apr 16, 2009 8:20am Apr 16, 2009 8:20am
Quoting Voldemort
yes but you are flat... what do you think happens when you "close" a long (buy) position???? in this case "close" = "sell"
Close buy = sell (always)

I think the true reason behind the ban is hidden agenda. They know that you can make tons of money trading both sides simultaneously. This is becoming too "popular".
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