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CFTC NEW Document - Overseas Accounts OK?

  • #21
  • Sep 1, 2010 2:45pm Sep 1, 2010 2:45pm
IBFX Australia is Open**

**US Investors may open an account and trade with IBFX Australia for at least one year based on current CFTC regulations.


IBFX Australia opened today, September 1, 2010.

What does this mean to you?

· Higher Leverage Options.

o Leverage options of 100:1, 200:1, and 400:1 will be available through IBFX Australia.

· No Hedging Restrictions.

o IBFX Australia has no restrictions on hedging. Please understand a simultaneous long and short position on the same currency pair in your account may be detrimental. )For the portion of the position that is hedged, you are eliminating the potential for profit or loss while potentially increasing the cost of the trade to you.)

· You can deposit in the Australian Dollar.

o With IBFX Australia you have the option of opening up a US dollar or an Aussie dollar denominated account. (USD dollar denominated accounts can only deposit funds in US dollars and Aussie dollar denominated accounts can only deposit funds in Aussie dollars.)

· No First In First Out (FIFO) Restrictions.

o Australia does not have the same FIFO rules as the US. Therefore, FIFO will not come into effect with your IBFX Australia account.


If you wish to open an account with IBFX Australia, you must submit an online IBFX Australia Application at www.ibfx.com.au. (However, after applying for and being approved for an IBFX Australia account, you may transfer funds from your IBFX US account to your IBFX Australia account. Of course you can also fund your IBFX Australia with credit/debit cards or bankwire. )

Please contact me for further assistance and information about IBFX Australia. I am in the office 4:00pm to 2:00am Eastern Time Monday through Thursday. You may contact me by telephone at 801-930-6914 or toll free 866-468-3739 – Option 1 and ask for Allison at extension 5914.


Important Note: You may enter my direct extension (5914) immediately after pressing the asterisk (*) two times from the main menu and your call will be directly transferred to me. J

To confirm the receipt of this email, please reply with your acknowledgement and any questions I can answer for you.

I look forward to hearing from you so I can assist you in opening a live trading account with InterbankFX Australia.

Have a great day!
We are our own best indicator.
  • #22
  • Sep 1, 2010 3:00pm Sep 1, 2010 3:00pm
So, this means the overseas restrictions on October 19th won't be going into effect? Sounds good. I might just open an account with IBFX Australia (primarily for hedging) and transfer the funds from my other IBFX accounts. Will see ...
  • #23
  • Sep 1, 2010 6:44pm Sep 1, 2010 6:44pm
FYI, GreenTrader has a conference call sch'd for tomorrow at 4:15PM EST: http://www.greencompany.com/Educatio...Meetings.shtml

GreenTrader will have a rep from Investment Law Group on the call to discuss the new rules. They published an article discussing the subject: http://www.investmentlawgroup.com/in...227&Itemid=127

Looks like the information we already received from FXCM, FXSol and dbFX was accurate; business with them will not be affected.

Caveat emptor: If you're doing business with an offshore broker, you better make sure they are rock solid because you'll most likely be trading without any CFTC protection.
  • #24
  • Sep 1, 2010 7:03pm Sep 1, 2010 7:03pm
Quoting Slack
FYI, GreenTrader has a conference call sch'd for tomorrow at 4:15PM EST: http://www.greencompany.com/Educatio...Meetings.shtml

GreenTrader will have a rep from Investment Law Group on the call to discuss the new rules. They published an article discussing the subject: http://www.investmentlawgroup.com/in...227&Itemid=127

Looks like the information we already received from FXCM, FXSol and dbFX was accurate; business with them will not be affected.

Caveat emptor:...
That's awesome!! We should invite Greentrader here to have a permanent like "sticky" thread here so they can update us on anything that will be affecting the trading community. These guys are great. They first successfully fought off the "Financial Transaction Tax" and this time, they fought really hard for us.
Make your losses in demo. Earn your profits live.
  • #25
  • Sep 2, 2010 10:42am Sep 2, 2010 10:42am
Hello to the thread and community,

I spoke with the CFTC about this issue and will be participating on Green's conference call this afternoon. Please read the above mentioned article which can be accessed at http://www.investmentlawgroup.com/cf...orex_rules.htm
The CFTC attorney I spoke with took the position that overseas intermediaries will not be able to serve as counterparties to U.S. retail investors in OTC forex transactions. We will explore this further on the call but this may be the CFTC's position given that it comports with the reading of the CEA after Dodd-Frank's changes.

I will look for more questions on this thread that I may be able to help address.
  • #26
  • Sep 2, 2010 10:52am Sep 2, 2010 10:52am
Quoting forexlawman
Hello to the thread and community,

I spoke with the CFTC about this issue and will be participating on Green's conference call this afternoon....
what kind of country does this to there people
  • #27
  • Sep 2, 2010 10:55am Sep 2, 2010 10:55am
Quoting pilotui
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://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/forexfinalrulefactsheet.pdf
Hello Pilotui,

The CFTC document in itself is not where the overseas account information is. It is contained in the Dodd Frank bill which is 800 pages long. GreenTrader weblog seems to take a good stab at this but it appears that those FX companies that want to have US clients will need to register with the CFTC.

http://www.greencompany.com/blog/index.php?postid=92
  • #28
  • Sep 2, 2010 11:01am Sep 2, 2010 11:01am
Quoting PFGBest FX
Hello Pilotui,

The CFTC document in itself is not where the overseas account information is. It is contained in the Dodd Frank bill which is 800 pages long. GreenTrader weblog seems to take a good stab at this but it appears that those FX companies that want to have US clients will need to register with the CFTC.

http://www.greencompany.com/blog/index.php?postid=92
ok so lets say any fx broker ouside of the u.s.a. register with the CFTC, will this broker be able to offer there US clients higher leverage, hedging and don't have to worry about the FIFO rule, or do they have to follow CFTC laws when it comes to there US clients witch means lower leverage, no hedging and must do FIFO rule. please give us some kind of feed back
  • #29
  • Sep 2, 2010 3:17pm Sep 2, 2010 3:17pm
Post Telecon Notes: Bottom line, we have to wait for CFTC's clarification on their interpretation of Dodd-Frank effect on unregistered foreign brokers.


A couple rays of hope from my perspective:

 

  1. CFTC'c could make "registration" for some foreign brokers a non-issue by offering exemptions for certain US friendly countries.
  2. If you look at the at latest CFTC published Data on FCM's, it could imply your broker is already in compliance.


A few possible scenarios:

  1. CFTC could loosen their stance.
  2. Foreign brokers could cut off US customers at the knees rather than deal with the headache.
  3. Depending the amount of $ multi-country brokers stand to lose, we could see a legal challenge to Dodd-Frank or CFTC's interpretation.
  4. Democrats get tossed into the street on next election and Dodd-Frank gets heavily revised or tossed out with the Dems.

  • #30
  • Sep 2, 2010 3:58pm Sep 2, 2010 3:58pm
Quoting Slack
Post Telecon Notes:...
Slack,
I didn't have a chance to listen to the telecon. Was anything said about UK brokers who are regulated by FSA? thanks
  • #31
  • Sep 2, 2010 4:09pm Sep 2, 2010 4:09pm
Quoting Toothman
Slack,
I didn't have a chance to listen to the telecon. Was anything said about UK brokers who are regulated by FSA? thanks
Not really. No new information was given so we are still in limbo.
  • #32
  • Sep 2, 2010 4:25pm Sep 2, 2010 4:25pm
I called FXCM

I have a account with FXCM UK

Bottom line....They do not know....When they know they will let us know in an official email.

WE ARE IN LIMBO
  • #33
  • Sep 2, 2010 7:31pm Sep 2, 2010 7:31pm
Yeah, but whatever the hell happened to the study? Does anybody recall hearing about this? I don't. If anyone else had, I think we'd have heard about it a lot sooner than this. Or, maybe this is just par for the course, where they do stuff like this behind everybody's back? If so, that's sort of like taxation without representation isn't it? ... albeit they're not exactly raising taxes, although in many ways it's the same.
  • #34
  • Sep 3, 2010 8:33am Sep 3, 2010 8:33am
Quoting fxoxford
ok so lets say any fx broker ouside of the u.s.a. register with the CFTC, will this broker be able to offer there US clients higher leverage, hedging and don't have to worry about the FIFO rule, or do they have to follow CFTC laws when it comes to there US clients witch means lower leverage, no hedging and must do FIFO rule. please give us some kind of feed back
The CFTC would say that any broker, wherever based, has to abide by U.S. law with respect to their interaction with U.S. clients. An overseas broker registered with the CFTC as either an FCM or RFED has more than likely decided to willingly accept U.S. law in an effort to service U.S. retail clients.

This is not to say that other overseas brokers will choose not to register and may offer contracts to U.S. retail customers that do not comply with the CEA or the new regulations. Should overseas brokers choose to offer these contracts, the CFTC could seek to enforce U.S. law against them, but many practical realities exist in doing so.

Some additional color on this issue can be found in this recent article, http://www.investmentlawgroup.com/cf...orex_rules.htm
  • #35
  • Sep 5, 2010 8:26am Sep 5, 2010 8:26am
I'm told that somewhere in the new regulations is a stipulation that US brokers with offshore entities (like fxcm, fxdd, ibfx and others) have up to a year (or close to it) to have the foreign entity register with the cftc and nfa and come into compliance.

I think brokers in this situation are encouraging traders to move accounts to the foreign entity.

After listening to 1 conference call on the new regs it sounds like the cftc will go after brokers and not traders. So if you have an account with a foreign broker an option is to keep trading and let them fight it out.
  • #36
  • Sep 5, 2010 8:31am Sep 5, 2010 8:31am
Also one other supposed loophole is if you use a broker that is STP only. The Collective is applying for that status. With an STP broker they don't serve as counter party to your trades.

This is something I hope they discuss on the next Green conference call.
  • #37
  • Sep 6, 2010 10:22am Sep 6, 2010 10:22am
Quoting nubchai
Also one other supposed loophole is if you use a broker that is STP only.
I highly doubt it. STP does not avoid the issue of the counter-party, unless you're trading directly with the banks themselves, your STP broker is still acting as your counter-party (all of the ECNs operate this way).

Quote
The Collective is applying for that status.
Applying thru whom? The NFA? No records of any application there. The Collective is completely unregistered, and at this point, operating in a gray-area legally as of Oct 18th (as is any other US-based unregistered broker).
  • #38
  • Sep 6, 2010 11:29am Sep 6, 2010 11:29am
Quoting Trader KGB
I highly doubt it. STP does not avoid the issue of the counter-party, unless you're trading directly with the banks themselves, your STP broker is still acting as your counter-party (all of the ECNs operate this way).

Applying thru whom? The NFA? No records of any application there. The Collective is completely unregistered, and at this point, operating in a gray-area legally as of Oct 18th (as is any other US-based unregistered broker).
Someone on the Yahoo Metatrader list posted an Email he had received from the Collective. The first part said they had been planning for the CFTC decision for months and had applied to be STP only. No idea who they applied through. I'm not a member of the collective btw.

Sandy
  • #39
  • Sep 6, 2010 12:03pm Sep 6, 2010 12:03pm
Quoting nubchai
The first part said they had been planning for the CFTC decision for months and had applied to be STP only. No idea who they applied through. I'm not a member of the collective btw.
I assume they're essentially a white-label for Citi (or whomever their main LP is now), acting in the same manner as ATC is for FXCM. They didn't need to register before, but they have to now.

If they applied to the NFA, their application would show up in BASIC search on the NFA's site, there is no match currently. They can only be an IB or a full-fledged FCM/RFED. Their exists no third option as an STP broker (AFAIK).
  • #40
  • Sep 6, 2010 12:39pm Sep 6, 2010 12:39pm
At this time, I would not believe anything your broker says about the matter. Unless you hear it from the horses mouth (CFTC), its all hearsay. From what I know, brokers know just about as much as we trader do.

The 'overseas clause' was introduced in the Dobb-Frank proposal and CFTC has not, as of yet, commented about it. Because 'overseas' is a very sensitive, legal stance, so I'm sure CFTC is handle this discussion with kid gloves.

CFTC can not regulate traders, only brokers. Which is part of the 'overseas' problem for the CFTC. They do not have jurisdiction over 'overseas' brokers. Period. Because of this, traders can LEGALLY trade with any broker they like overseas. All the CFTC can do is ASK brokers (or non-us governments) located outside US jurisdiction to not accept US trades. The decision to comply with US terms is completely up to that country at hand. There will always be that one country that will not side with US law.

Instead of brokers moving accounts overseas, I'm hoping brokers would become banks and move away from CFTC/NFA/SEC regulations. There are a lot of benefits to trading with a bank, such as funds protections (FDIC). For those that don't know what I'm talking about, look into CitiFX and DBFX. These brokers banks and are under banking regulations and do not have to deal with CFTC rules/regulations. Would like to see US brokers follow the ways of Dukascopy, SaxoBank, Citi, DBfx.
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