U.S. Retail Clients can Still Trade with Foreign Banks until July 2011 | Forex Factory

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U.S. Retail Clients can Still Trade with Foreign Banks until July 2011

  • #1
  • First Post: Oct 1, 2010 1:38pm Oct 1, 2010 1:38pm
U.S. Retail forex traders will still be able to trade with foreign banks without regard to the CFTC's regulations on leverage, hedging or otherwise until July 16, 2011. This was confirmed by an attorney at the CFTC.


Please see this article on the subject: http://www.investmentlawgroup.com/content/view/237/61/
  • #2
  • Oct 1, 2010 2:36pm Oct 1, 2010 2:36pm
Is this only for trading directly with a bank ?

What about trading with a non-bank market maker ?
  • #3
  • Oct 1, 2010 2:41pm Oct 1, 2010 2:41pm
Yeah, the article that ForexLawman posted, seemed to be ambigious about non-bank offshore brokers like GoMarkets. Can we still trade with such brokers until July 2011?
  • #4
  • Oct 2, 2010 9:25am Oct 2, 2010 9:25am
I was wondering if ATCBrokers would still be affected , if so I will close them since they only offer 0.10 lots. Need smaller now. Thanks! IMO


ut2
  • #5
  • Oct 2, 2010 10:21am Oct 2, 2010 10:21am
I have a FXCM UK account tied into ATC Brokers, and that will be switched over to FXCM US by October 18th. The only thing that will change in the ATC Brokers MT4 is the new 1:50 leverage.
  • #6
  • Edited 5:06pm Oct 3, 2010 4:53pm | Edited 5:06pm
Quoting Cocoflanel
Is this only for trading directly with a bank ?

What about trading with a non-bank market maker ?
Directly with a bank, yes. If you use a broker that broker will have to be registered with the CFTC and NFA as either an FCM or RFED after October 18th, 2010. Please see this article as a primer http://www.investmentlawgroup.com/cftc_final_retail_forex_rules.htm
  • #7
  • Oct 3, 2010 5:01pm Oct 3, 2010 5:01pm
Quoting cica515
Yeah, the article that ForexLawman posted, seemed to be ambigious about non-bank offshore brokers like GoMarkets. Can we still trade with such brokers until July 2011?
Unregistered brokers cannot offer or enter into retail forex transactions with U.S. persons after October 18th, 2010. Foreign banks have until July 16, 2011 until they can no longer intermediate forex contracts for U.S. persons. SEC registered broker-dealers as well as financial holding companies will have to wait for rules from the SEC and bank regulators, respectively. If the SEC and bank regulators fail to adopt final rules to regulate retail forex activity ahead of July 16, 2011, broker-dealers and financial holding companies will also become prohibited counterparties because of changes to the Commodity Exchange Act that were contained in Dodd-Frank.
  • #8
  • Oct 3, 2010 5:48pm Oct 3, 2010 5:48pm
Quoting forexlawman
Unregistered brokers cannot offer or enter into retail forex transactions with U.S. persons after October 18th, 2010.
That settles it for me, I'm moving back to US brokers by October 19th. Doesn't mean I'm happy about this, though.
  • #9
  • Oct 3, 2010 6:44pm Oct 3, 2010 6:44pm
I guess, I'm going to keep saying this until I am blue in the face:

1) The United States Government, does not have Regulatory Authority over any foreign entity conducting business within its own boarders and that happens to have U.S. Citizens as customers.

2) The United States Government, does not have Constitutional Authority to prohibit and/or force any U.S. Citizen to conduct business with any entity, either foreign or domestic.

3) The United States Government, does have United States Code (USC) precedent, to instantiate and/or maintain monopolistic commerce, anywhere within the United States of America.

At some point, U.S. based FX Retail Traders are going to rally and unite around these three (3) central themes.

If anyone (and I mean anyone) from the CFTC, NFA, or the United States Congress, wishes to establish a Forex Factory Forum account, logon, and debate this matter with me directly, I gladly welcome that opportunity.

The Government has over-stepped its authority and intends on using scare tactic, bullying, 1/2 truth, 3/4 truth, 1/4 truth, mis-information, dis-information, authoritative hyperbole, hyper-legalism, nonsequiturial rhetoric, linguistic diversion, irrational syllogism, non-logical assumptive declaration, orphaned first cause first premise prologue (false premise) and any means necessary to scare the crap out of you, such that you merely fall in line and go along to get along.

I stand on the Constitution of the United States of America and the United States Code. And, I challenge ANYONE to challenge my three pronged premise. Dodd and Frank, that means you, too. CFTC attorneys are welcome to the challenge.

Bottom line: You cannot force an American Citizen to engage in unlawful business practices and you cannot force a foreign entity to abide by your laws, whims or rules. Period.
------------------

I will take this opportunity to draw the above three pronged premise to the attention of every single Foreign Bank and Foreign FX Intermediary around the world. Keep doing what you are presently doing. If you feel uncomfortable with maintaining you FX Retail footprint here in the U.S., after the announcement by the CFTC, then simply remove all FX Retail operations from the shores of the United States of America and put them in your homeland. Change the mailing address to your FX Retail base of operations in your homeland and require that all new applicants mail their application to the new address. DO NOT require your new customers send their new account applications to a U.S. mailing address.

You will then be a foreign business entity conducting business from within your own country and subject ONLY to those regulations that govern such operations in your own homeland. You DO NOT need to host servers, applications, computer equipment of any kind, here in the United States of America, in order to conduct FX Retail operations. This entire business model is conducted on the back-bone of IP packets and TCP/IP network protocol. Thus, you DO NOT need to maintain a physical presence within the boarders of the United States of America.

At that point, it will be the business of the United States Government to hunt the American Citizen down, merely because he/she engaged in their Constitutional Right to make the private decision to open an account with a Foreign Business concern - bottom line.

That's the stripped down, nuts and bolts reality the United States Government will have to face. Sooner, or later. If the government thinks that it can nail an American Citizen to the wall, because he/she engaged in their Constitutional Right to choose their own business partner (foreign or domestic), then bring that charge to court, where it belongs.

The truth of the matter is that the Congress needs to draft an amendment to the Constitution, in order to make an civil proceeding stick. And, that will not happen. Why? Because this is a matter of "an Acceptable and Reasonable Expectation to the Right of Privacy" and United States Government cannot prove national security and/or public safety risk theory and thus the matter will not rise to the level necessary to foster a Constitutional amendment.

Fool me once, shame on you. Fool me twice.........
  • #10
  • Oct 3, 2010 7:23pm Oct 3, 2010 7:23pm
Quoting WaveTop
I guess, I'm going to keep saying this until I am blue in the face:

1) The United States Government, does not have Regulatory Authority over any foreign entity conducting business within its own boarders
You are quite correct that the CFTC will face serious challenges enforcing these provisions with respect to overseas entities.

Note well that the Commodity Exchange Act and CFTC's final rules on retail forex explicitly make it illegal for unregistered counterparties to intermediate OTC forex contracts for U.S. retail clients - not the other way around. There is no provision in the CEA or CFTC's final rules that makes it expressly illegal for a U.S. person to use a foreign broker.
  • #11
  • Oct 3, 2010 7:25pm Oct 3, 2010 7:25pm
I agree with you. What people will join together and challenge the rules in a court of law? I have talked to three tax investment attorneys who are very aware of the rules the cftc made. Not one of the three would even entertain the idea of challenging the cftc rules in a court of law. I believe us forex traders should ban together and join trade association groups like the one greentrader started. Together us forex traders might have a chance and get represented the way they should be.

Regards,
Jeff

Quoting WaveTop
I guess, I'm going to keep saying this until I am blue in the face:

1) The United States Government, does not have Regulatory Authority over any foreign entity conducting business within its own boarders and that happens to have U.S. Citizens as customers.[color=Black]...
  • #12
  • Oct 3, 2010 9:55pm Oct 3, 2010 9:55pm
Quoting forexlawman
Note well that the Commodity Exchange Act and CFTC's final rules on retail forex explicitly make it illegal for unregistered counterparties to intermediate OTC forex contracts for U.S. retail clients - not the other way around. There is no provision in the CEA or CFTC's final rules that makes it expressly illegal for a U.S. person to use a foreign broker.
Of course, they will try to say that the trader is splitting hairs using that logic. Of course, hairs that they themselves created!

They read as if they almost have no brains. Yet, we know that's not true. So, simple deduction tells me that there must be an ulterior motive. There's something else going on, here. They never shoot straight with the American People, which by definition means that they are going after another objective.

Logically, speaking, of course,
  • #13
  • Oct 3, 2010 10:01pm Oct 3, 2010 10:01pm
Quoting azjeff
I agree with you. What people will join together and challenge the rules in a court of law? I have talked to three tax investment attorneys who are very aware of the rules the cftc made. Not one of the three would even entertain the idea of challenging the cftc rules in a court of law. I believe us forex traders should ban together and join trade association groups like the one greentrader started. Together us forex traders might have a chance and get represented the way they should be.

Regards,
Jeff
I was thinking the same thing. Retail'ers ought to unite over this. A PAC, a non-arb Union of some hybrid kind, or trade association - all sound like in-play ideas to me.

The thing that I don't like about the ramp-up period to all this, was that the CFTC made a big deal about writing to them with concerns, while the entire time, it was Congress doing the back-door'ing on the Retail trader at a completely different level. I'm not surprised by that kind of slick move from Congress, I'm just ticked about it. People should have been writing Dodd and Frank, not the CFTC. But, who knew.
  • #14
  • Oct 4, 2010 3:54pm Oct 4, 2010 3:54pm
Once we get some fresh blood in congress/senate that welcomes back capitalism we shall see parts of this squashed. The government has no right in the US to control our legal actions to trade. If they want Americans to stop wasting money then stop the lottery, the biggest loser of them all but a major money maker for the States. They have no idea what is really going on but yet they impose regulations that hurt not help. I could care less about 50:1, 100:1, I will find a work around, I already have something in play. The US gov cannot control their borders, their deficient or make decisions that the majority of US citizens endorse, that is why they are getting fired, plain and simple the change of guard is coming.


Quoting WaveTop
I was thinking the same thing....
  • #15
  • Oct 4, 2010 6:25pm Oct 4, 2010 6:25pm
"2) The United States Government, does not have Constitutional Authority to prohibit and/or force any U.S. Citizen to conduct business with any entity, either foreign or domestic."

Sure it does. Try sending money to Cuba or Taliban. It has plenty of practical power over the banks which would try to do so. At least with the Taliban and their friends, this is a good idea.

More to the point, try playing on-line gambling games. Why can't you? Because US-based gambling interests would lose market share.

The ulterior motives re FX are of course benefitting the US-based dealers who have financial and political power.
  • #16
  • Oct 4, 2010 6:57pm Oct 4, 2010 6:57pm
"2) The United States Government, does not have Constitutional Authority to prohibit and/or force any U.S. Citizen to conduct business with any entity, either foreign or domestic."

Sure it does. Try sending money to Cuba or Taliban.

It has plenty of practical power over the banks which would try to do so.
  • #17
  • Edited 8:44pm Oct 4, 2010 7:54pm | Edited 8:44pm
<Quote> You are quite correct that the CFTC will face serious challenges enforcing these provisions with respect to overseas entities.

Note well that the Commodity Exchange Act and CFTC's final rules on retail forex explicitly make it illegal for unregistered counterparties to intermediate OTC forex contracts for U.S. retail clients - not the other way around. There is no provision in the CEA or CFTC's final rules that makes it expressly illegal for a U.S. person to use a foreign broker <Quote>

CFTC and US Congress know if they made it illegal for US citizens to trade offshore, they will violate the fundamental US constitution rights. Thus they chose to do it the other way around just like what they did to online gambling. Nevertheless US online gambling industry has evolved into a $15 billion market.


  • #18
  • Oct 4, 2010 11:40pm Oct 4, 2010 11:40pm
Are retail accounts with Dukascopy affected by this new law??
  • #19
  • Oct 7, 2010 3:51pm Oct 7, 2010 3:51pm
Foreign and local banks are allowed to take US clients and they also offer higher leverage in some cases.

Does someone know the retail forex trading website for the following,

Goldman Sachs, ABN AMRO, Morgan Stanley, Saxobank, etc.

Thanks much.
  • #20
  • Oct 7, 2010 7:59pm Oct 7, 2010 7:59pm
Saxobank offers 200:1 on select currency pairs and seems to be taking US residents according to their website.

Being a bank makes all the difference it looks like. Brokers can't take US residents but banks are exempt from this rule it looks like.

Do your research, here is the link:

http://us.saxobank.com/en/trading-pr...intrading.aspx
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