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CFTC NEW Document - Overseas Accounts OK?

  • #1
  • First Post: Aug 31, 2010 5:19pm Aug 31, 2010 5:19pm
The document given to me by FXCM customer service

It says nothing about overseas accounts at ALL

So US citizens with UK accounts are safe?

http://http://www.cftc.gov/ucm/group...efactsheet.pdf
Attached File(s)
File Type: pdf forexfinalrulefactsheet.pdf   125 KB | 889 downloads
  • #2
  • Aug 31, 2010 5:22pm Aug 31, 2010 5:22pm
Please wait for a site operator to respond.

You are now chatting with 'FXCM - Liana'

FXCM - Liana: Welcome to FXCM's Live Chat Support. Please give me a moment to review your first question.
FXCM - Liana: Hello Darren
FXCM - Liana: How are you today?
Darren: worried
Darren: very very concerned
FXCM - Liana: I understand
FXCM - Liana: The good thing Darren
FXCM - Liana: Is that FXCM is ahead of class in terms of many things
FXCM - Liana: This being one of them
FXCM - Liana: We already knew what the effects of the laws were going to be before it was passed
FXCM - Liana: and have already implemented them before they were passed
FXCM - Liana: so, nothing changes on our end
Darren: so what will happen to US customers using UK accounts?
FXCM - Liana: Nothing
Darren: are you saying I get to keep my 400:! leverage?
Darren: 1
Darren: sorry
FXCM - Liana: No
FXCM - Liana: well
FXCM - Liana: You have a standard account right Darren?
Darren: micro and standard
FXCM - Liana: I understand
FXCM - Liana: Micro division communicates with their clients via email
FXCM - Liana: Would you like me to give you their link?
Darren: no, just tell me whats up with the standard account then
FXCM - Liana: Unless you would like to upgrade to a standard account
Darren: so are we all going to 50:1 leverage?
Darren: I have a standard account
FXCM - Liana: Okay thanks
Darren: sure thing
FXCM - Liana: Well, i'm not sure what is happening with micro
FXCM - Liana: but your standard account, the UK default leverage is 200:1
FXCM - Liana: and that is not going to change
Darren: WOW...that is awesome news.
Darren: I guess I'll email the micro guys then to see whats up
FXCM - Liana: Well let me clarify
FXCM - Liana: I can't say that it is not going to change
FXCM - Liana: because I can't far into the future
FXCM - Liana: but the laws have not changed the default leverage on UK based accounts
Darren: OK
FXCM - Liana: http://www.cftc.gov/ucm/groups/publi...efactsheet.pdf
Darren: Is FXCM going to release a public statement like IBFX did? It sure would help...there are a lot of people on Forex forum boards going nuts in a panic over this
FXCM - Liana: Here is something you may want to read Darren
Darren: ok..so what is FXCM a FCM or RFED?
Darren: so this is the FINAL document from the gov't? I don't see anything about overseas accounts or anything like that in either the proposed rules or accepted proposed rules with exceptions
FXCM - Liana: Yes
FXCM - Liana: You are right
FXCM - Liana: you have to remember that people like to speculate too
FXCM - Liana: So what you read on the forums
FXCM - Liana: may not necessarily be true
Darren: So on 18 OCT there will be not changes made to my leverage on a standard account? I understand I have to contact Micro to get Micro specifics...thanks
FXCM - Liana: You are welcome Darren
Darren: Thanks
  • #3
  • Aug 31, 2010 5:38pm Aug 31, 2010 5:38pm
Hey, I can't get the link in the original post to work ...

The link in the second post works fine though.
  • #4
  • Aug 31, 2010 6:38pm Aug 31, 2010 6:38pm
Quoting ecTrade
Hey, I can't get the link in the original post to work ...

The link in the second post works fine though.
so what do you think...there's nothing about anything concerning Overseas acct's!
  • #5
  • Aug 31, 2010 7:34pm Aug 31, 2010 7:34pm
Looks like IBFX thinks US citizens will have to move their offshore accounts back to US.



August 31, 2010
by Abigail DeGraff
As many of you are aware, the U.S. Commodity Futures Trading Commission (CFTC) announced today final regulations regarding off-exchange retail foreign currency transactions. These rules are supported by Interbank FX, LLC, in providing an enhanced regulatory environment that will help protect retail forex investors and will also create a level playing field for all rules and regulations within the United States.
The new rules will impact thousands of U.S. customers with millions of dollars invested in overseas brokers. Beginning October 18, 2010, overseas brokers will no longer be able to service U.S. customers. These rules ensure U.S. customers will receive the protections afforded by U.S. regulations. Interbank FX has invested significant resources to make our trading platform, MetaTrader 4 (MT4) US compliant for newly passed FIFO rules by the National Futures Association (NFA). We believe we have one of the only NFA/CFTC compliant MetaTrader 4 platforms available. We allow all types of trading and all types of Expert Advisors to trade on our platform.
Interbank FX has continually supported the original Farm Bill of 2008, allowing the CFTC more authority over forex dealers. Because of this, we’ve foreseen such potential CFTC regulation changes, paving the way for our U.S. entity to be equipped with efficient operations, technology and overall transaction transparency to serve our growing customer base. For over two years, we’ve mandated all US solicitors and Money Managers to be registered with the CFTC and members of the NFA, anticipating the changes in the regulatory framework that have been published today.
In addition, we believe the CFTC has reached a reasonable compromise with the Forex Dealer Coalition (FXDC) regarding leverage requirements--making 50:1 leverage available to all U.S. customers. This compromise on leverage, as opposed to 10:1 in the proposed rules, allows the United States forex community to remain competitive with global opponents.
We consider these rules to be in the best interest of our customers, and incessantly strive to improve industry standards while accommodating customer expectations. That’s how we do business. That’s our culture. That’s our technology.
Interbank FX looks forward to continuing to provide a transparent and open trading environment for all our customers.For more information on our transparency metrics, please view our report card here.
To view the official CFTC release, click here.
Questions and Answers Regarding Final Retail Foreign Exchange Rule, click here.
The IBFX Family
  • #6
  • Aug 31, 2010 9:51pm Aug 31, 2010 9:51pm
Yeah, but if you follow the link to the CTFC news release, it doesn't corroborate anything they're saying. So, one can only assume they got it from some other source.

Either that or it's purely hearsay, and they're just saying it because they don't want anybody to move their accounts overseas. I don't know? ...

Of course with the new leverage set to 50:1, I don't think they have too much to worry about. Most folks would probably just assume stay here if they have accounts in the U.S.
  • #7
  • Aug 31, 2010 10:52pm Aug 31, 2010 10:52pm
Quoting ecTrade
Yeah, but if you follow the link to the CTFC news release, it doesn't corroborate anything they're saying. So, one can only assume they got it from some other source.

Either that or it's purely hearsay, and they're just saying it because they don't want anybody to move their accounts overseas. I don't know? ...

Of course with the new leverage set to 50:1, I don't think they have too much to worry about. Most folks would probably just assume stay here if they have accounts in the U.S.
I've heard from multiple sources that IBFX is correct. I'm told that the next thing to expect is a statement from SEC where they don't get involved and lower leverage to 50:1 for B/Ds, and then we get a policy about sending funds abroad. It's even possible that FXCM is already in trouble for overstepping on encouraging people to move funds. Now let's see if those funds ever come back. I just had a buddy invested in a hedge fund with FXCM lose everything overnight, so watch out if they are pulling in the chips.
  • #8
  • Aug 31, 2010 11:44pm Aug 31, 2010 11:44pm
Quote
FXCM - Liana: The good thing Darren
FXCM - Liana: Is that FXCM is ahead of class in terms of many things
FXCM - Liana: This being one of them
FXCM - Liana: We already knew what the effects of the laws were going to be before it was passed
FXCM - Liana: and have already implemented them before they were passed
FXCM - Liana: so, nothing changes on our end
Darren: so what will happen to US customers using UK accounts?
FXCM - Liana: Nothing
Why is this rep so certain here...

Quote
FXCM - Liana: Well, i'm not sure what is happening with micro
...
FXCM - Liana: Well let me clarify
FXCM - Liana: I can't say that it is not going to change
FXCM - Liana: because I can't far into the future
FXCM - Liana: but the laws have not changed the default leverage on UK based accounts
...but not very certain here? This doesn't qualify as a straight answer to me. And of course the laws have not changed the leverage for UK accounts because they're governed by the FSA.
  • #9
  • Sep 1, 2010 3:05am Sep 1, 2010 3:05am
Quoting wannatradefx
I've heard from multiple sources that IBFX is correct. I'm told that the next thing to expect is a statement from SEC where they don't get involved and lower leverage to 50:1 for B/Ds, and then we get a policy about sending funds abroad. It's even possible that FXCM is already in trouble for overstepping on encouraging people to move funds. Now let's see if those funds ever come back. I just had a buddy invested in a hedge fund with FXCM lose everything overnight, so watch out if they are pulling in the chips.
Yeah, but I don't recall hearing about the study (until just a few days ago), or their soliciting comments from anyone, so I'm wondering when this was supposed to happen? It doesn't sound like anyone else has heard about it until recently either.
  • #10
  • Sep 1, 2010 3:15am Sep 1, 2010 3:15am
this is what I got:

>>> Darren 8/31/2010 >>>

I was told by a FXCM customer service rep that the UK account I hold (standard) will not have it's leverage affected by the new CFTC rules. Great!

Now what about micro...will it still be 400:1 after 18 Oct? ANY INFO would be greatly appreciated!

Thanks

-Darren

---

Hi Darren,

Thank you for your email. No, please be aware that CFTC regulates US accounts not UK accounts. UK accounts are regulated by the FSA.

FXCM Micro is a division of FXCM that provides new traders with access to the currency markets for as little as $25. With small (1K) trade sizes and access to No Dealing Desk execution, FXCM Micro provides a great way to learn to trade currency.
Regards,

Helene Zhu
FXCM Micro - Sales & Client Services
-----
From: Darren Willis[SMTP[email protected]]
Sent: Tuesday, August 31, 2010 8:50:35 PM
To: fxcmmicro-helene
Subject: Re: NEW CFTC RULES and Micro Acct Impact
Auto forwarded by a Rule
Hi Helene, thanks for the reply back...I am a US citizen with a UK account...I'm still OK?

Thanks again!
---
Hi Darren,

Thank you for your email. Yes, as long as your account is with FXCM UK, you have to abide by the FSA regulatioins.

FXCM Micro is a division of FXCM that provides new traders with access to the currency markets for as little as $25. With small (1K) trade sizes and access to No Dealing Desk execution, FXCM Micro provides a great way to learn to trade currency.
Regards,

Helene Zhu
FXCM Micro - Sales & Client Services
For the fastest response 24 hours a day, post your questions on the FXCM Micro Forum.

----
From: Darren [SMTP[email protected]]
Sent: Tuesday, August 31, 2010 9:12:20 PM
To: fxcmmicro-helene
Subject: Re: your inquiry
Auto forwarded by a Rule
Ok (playing devil's advocate here) Will I be forced to move my account back to the US on 18 Oct?

THANKS AGAIN!!

--

Hi Darren,

Thank you for your email. At this point, I do not see why you would be foced to move back to the US.

FXCM Micro is a division of FXCM that provides new traders with access to the currency markets for as little as $25. With small (1K) trade sizes and access to No Dealing Desk execution, FXCM Micro provides a great way to learn to trade currency.
Regards,

Helene Zhu
FXCM Micro - Sales & Client Services
For the fastest response 24 hours a day, post your questions on the FXCM Micro Forum.
  • #11
  • Sep 1, 2010 6:59am Sep 1, 2010 6:59am
FXCM wont allow US clients to trade their index products, even tho its regulated by FSA. I dont see how Darrens argument holds much merit. But i guess we will have just to wait and see until their lawyers figure it out.
  • #12
  • Sep 1, 2010 8:11am Sep 1, 2010 8:11am
Quoting shrike
FXCM wont allow US clients to trade their index products, even tho its regulated by FSA. I dont see how Darrens argument holds much merit. But i guess we will have just to wait and see until their lawyers figure it out.
I'm not trying to make an argument, only present what little info we have.

I agree with you and hadn't thought of that...also spreadbetting is off limits too for US citizens.

Hmmmmmmmmm

Prepare for the worst, hope for the best I guess!
  • #13
  • Sep 1, 2010 8:32am Sep 1, 2010 8:32am
Quoting pilotui
Prepare for the worst, hope for the best I guess!
Never a bad philosophy and one I agree with 100%.

The thing that worries me most is how many times potential regulations will be chopped and changed before finally settled.

Don't forget we are talking about public services here. They don't have much else to do other than take forever over reaching a final conclusion.

The end result may well be a totally different animal, so yes, hope for the best but make sure you've planned for the worst.
  • #14
  • Edited 8:50am Sep 1, 2010 8:47am | Edited 8:50am
Quoting shrike
FXCM wont allow US clients to trade their index products, even tho its regulated by FSA. I dont see how Darrens argument holds much merit. But i guess we will have just to wait and see until their lawyers figure it out.
Quoting pilotui
I'm not trying to make an argument, only present what little info we have.

I agree with you and hadn't thought of that...also spreadbetting is off limits too for US citizens.

Hmmmmmmmmm

Prepare for the worst, hope for the best I guess!
Hi shrike and pilotui,

To clarify on the topic of spreadbetting and trading stock indices.

Spreadbetting is only available for UK residents because of local UK tax law which allows for any gains made via spreadbetting to be exempt of UK capital gain taxes. Trading in the spreadbet account is the same as in the standard 10k account, only difference being in how it is classified so that UK residents can take advantage of the tax benefit.

(Using the US resident paying US taxes as an example) opening a spreadbet account wouldn't be anymore advantageous for a US resident because you're paying US taxes and not UK taxes, therefore subject to US tax law which doesn't exempt gains via forex trading from taxes. If Congress or any other country decided to adopt the same tax policy as the UK, I'm sure we would be as accomodating.

For CFD's through FXCM UK in the form of stock indices, gold, silver, and oil, these are not exchange traded products. US regulations prohibit us from offering them to US residents.

I will be posting on the FXCM Discussion thread at some point today in response to Sonicpunk's and pilotui's question/post with more information from FXCM.

-Jason
  • #15
  • Sep 1, 2010 9:35am Sep 1, 2010 9:35am
Quoting Jason Rogers
Hi shrike and pilotui,

To clarify on the topic of spreadbetting and trading stock indices.

Spreadbetting is only available for UK residents because of local UK tax law which allows for any gains made via spreadbetting to be exempt of UK capital gain taxes....
Can't wait Jason!
  • #16
  • Sep 1, 2010 11:48am Sep 1, 2010 11:48am
Quoting ecTrade
Yeah, but I don't recall hearing about the study (until just a few days ago), or their soliciting comments from anyone, so I'm wondering when this was supposed to happen? It doesn't sound like anyone else has heard about it until recently either.
I called my broker (FX Sol. UK.) today and they told me they see nothing in the new regulations that will force a US citizen with a UK account to move it back to the US. No changes to my account at all. Leverage still at 400:1 and hedging allowed. Don't know why IBFX is telling their people differently.
  • #17
  • Sep 1, 2010 11:50am Sep 1, 2010 11:50am
Quoting Toothman
I called my broker (FX Sol. UK.) today and they told me they see nothing in the new regulations that will force a US citizen with a UK account to move it back to the US. No changes to my account at all. Leverage still at 400:1 and hedging allowed. Don't know why IBFX is telling their people differently.
The rules are not in effect yet; the new rules are taking effect on Oct. 19, 2010. IBFX might be telling them what is going to happen after Oct. 19, 2010.

Just a thought.
Make your losses in demo. Earn your profits live.
  • #18
  • Sep 1, 2010 1:22pm Sep 1, 2010 1:22pm
My guess is that IBFX has been one of the brokers left out of the game of foreign offices for quite some time. They were left in the lurch when the FIFO and hedging occurred and lost a bit of business because of it. They got rid of the FIFO issue, but still have the hedging issue.

They just opened up their OZ office today, but they will not take Americans. We waited for a year and this is what we get... haha... My loyalty to IBFX is very short at this point.

They are obviously wanting the laws to accommodate them so they think Americans will come flocking back to them. They don't realize they will just get the scraps of a shrunken marketplace.

I spoke w/ forex.com one of my other brokers and they said they will issue a release by end of week. What sounded positive that they were not worried has turned into a 'wait for the release'.

If this does happen, I will just open accounts in my wife's name as she is a Japanese resident/citizen.

I have felt a great disloyalty for our country since our response to 9/11, and I continue to see ridiculous protectionism like this which is sickening. I hope some day that worship of dollars moves back to the worship of love, honesty and other values that are good for communities and cultures. Sad to see.....

Did Mansanto and IBFX merge...hahah....

How in the world can you limit a citizens right to invest in a foreign company or service that isn't focused on doing bad things to your Country? A very different country then the one I grew up in....
We are our own best indicator.
  • #19
  • Sep 1, 2010 1:29pm Sep 1, 2010 1:29pm
Quoting bluemele
My guess is that IBFX has been one of the brokers left out of the game of foreign offices for quite some time....
I agree 100% on the IBFX comments...thats how I took their release at least. They are on "no mans land" here, and have to now suck up to the CFTC.

Oh, I also agree with everything else you said!
  • #20
  • Sep 1, 2010 4:43pm Sep 1, 2010 4:43pm
Quoting Forexia
The rules are not in effect yet; the new rules are taking effect on Oct. 19, 2010. IBFX might be telling them what is going to happen after Oct. 19, 2010.

Just a thought.
No, they were telling me that when the new rules go into effect in Oct. they wouldn't effect my UK account. I wouldn't have to move my account back to US. and I could keep my 400:1 leverage. We'll see.
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