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What Offshore Brokers Accepting US Accts? 29 replies

US Citizens, CFTC, and foreign brokers 1 reply

What happens when US citizens switch to Non-CFTC Brokers 6 replies

Speak Out Against Proposed CFTC Leverage Change to 10-1 for all US Brokers. 26 replies

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Offshore Brokers... Solution to CFTC

  • #41
  • Oct 19, 2010 6:33pm Oct 19, 2010 6:33pm
Quoting Hulk1
Thanx for the great info guys! Out of these brokers can any list concerns they may have about each broker or past experiances? Because once you know they accept u.s. clients then the next question is???

Slippage?
How long does it take to get your money when requested?
Scalping allowed?
EA's?
Spread wideing?

All these are very important questions when finding a new broker...

My momma told me, "Ya better shop around!"
  • #42
  • Oct 19, 2010 7:34pm Oct 19, 2010 7:34pm
Quoting MMGood47
Is any of this even legal according to the Constitution? How can the Gov. tell us which brokers we can use? Next they'll try to tell us we can't purchase a BMW, Mercedes or Lexus. What if the only cars you could buy were Ford or Chevy?

I just find this all a little disconcerting , we lose a small bit of freedom everyday. I feel a good class action lawsuit coming, who's with me?
Summary of Constitutional Rights, Powers and Duties

Powers delegated to U.S. (National) Government:
#3) To regulate commerce with foreign nations and Indian Tribes.
It's Easy To Get In;.. It's Hard To Get Out
  • #43
  • Oct 24, 2010 1:22pm Oct 24, 2010 1:22pm
Quoting Slack
What kind of cheesy backwoods broker doesn't even have their account application on a secure server? Are these idiots for real?
Not to mention if you search their address in google maps, looks like their office is in a strip mall.
  • #44
  • Oct 24, 2010 2:04pm Oct 24, 2010 2:04pm
Quoting JP_s
Not to mention if you search their address in google maps, looks like their office is in a strip mall.
Yeah, I saw that that, too. If I investigated correctly, the owner looks like a US resident/citizen, if so, he's probably just using the company as some kind of tax shelter.

Just goes to show you, many of these broker/white label deals are crap. They are setup, and effectively, the same as an independent outside salesperson siphoning off a slice for their own pockets while providing no added value to the customer.

Hobble together a website, toss a company logo splash screen on the software and sha-zam, you're a white label. The real broker adds a slippage, feed delay... etc., so they're not out any $. Win/win situation suckers
  • #45
  • Oct 24, 2010 6:46pm Oct 24, 2010 6:46pm
btw, just a friendly reminder for those of us already / planning trade offshore http://www.irs.gov/pub/irs-access/f90221_accessible.pdf
  • #46
  • Oct 24, 2010 9:21pm Oct 24, 2010 9:21pm
Quoting John D
Summary of Constitutional Rights, Powers and Duties

Powers delegated to U.S. (National) Government:
#3) To regulate commerce with foreign nations and Indian Tribes.

Sorry but a nation is not a company of business
  • #47
  • Oct 25, 2010 11:38pm Oct 25, 2010 11:38pm
Quoting thor68
Sorry but a nation is not a company of business
Not sure what you're getting at but no matter.

Trade to trade well, no excuses!
JD
It's Easy To Get In;.. It's Hard To Get Out
  • #48
  • Oct 26, 2010 12:50am Oct 26, 2010 12:50am
Quoting Slack
btw, just a friendly reminder for those of us already / planning trade offshore http://www.irs.gov/pub/irs-access/f90221_accessible.pdf

Hello Slack
I have been reading your posts, please about offshore brokers. Is it now illegal for Us citizens to have trading accounts with offshore brokers? I was given this information by a freind but can't verify it. I will very much appreciate any inputs.
Thank you.
  • #49
  • Oct 26, 2010 2:36am Oct 26, 2010 2:36am
Quoting inemesit
Hello Slack
I have been reading your posts, please about offshore brokers. Is it now illegal for Us citizens to have trading accounts with offshore brokers? I was given this information by a freind but can't verify it. I will very much appreciate any inputs.
Thank you.
Hi - It's not illegal just severely restricted. Most, perhaps all, legit retail brokers will not accept USA customers. But, offshore broker/banks are still open for business till July 2011.

Some info here http://www.greencompany.com/blog/index.php?postid=96
  • #50
  • Oct 26, 2010 6:35am Oct 26, 2010 6:35am
Quoting inemesit
Hello Slack
I have been reading your posts, please about offshore brokers. Is it now illegal for Us citizens to have trading accounts with offshore brokers? I was given this information by a freind but can't verify it. I will very much appreciate any inputs.
Thank you.
Its not illegal to trade with an offshore broker.

The Franks-Dodd bill makes it illegal for brokers who have locations in the US and who takes the opposite side of their clients trade, to be regulated with CFTC/NFA. This rule refers only to bucket shop brokers that has locations on US soil. This does not include bucket shop brokers who has NO locations or affiliations on US soil. You can trade with any bucketshop broker overseas as long as that broker holds not locations/affiliation to US.

FXCM and others who opened up shop overseas screwed up because they moved to the UK but left the US division opened. Under the Franks-Dodd, FXCM is still regulated under US rules because they had a location/affiliation on US soil. Though US gov can't regulate FXCM UK, they can give all kinds of legal hell to FXCM US for moving US clients to their FXCM UK affiliates. What FXCM should have done was, moved to the UK and completely closed their US wing. This would have allowed them to keep their clients, keep leverage, and not have to worry about US regulators. (They should have fired their legal team for not knowing this).

Frank-Dodd bill has no barring on US brokers that does not take the other side of their clients trades, so brokers like, Interactive Brokers who passes clients trades on to the real market and/or matches one client trade with another clients trade, are excluded from the Frank-Dodd bill.

US regulations can not regulate brokers on foreign grounds. US regulators can only regulate brokers with ties and affiliation on US soil.

Brokers like Dukscopy are idea brokers to trade with because Dukas doesn't have any US locations/affiliations nor do they take the other side of their clients trades. Dukas is accepting US clients. I'm personally moving my personal trading account to them at the start of 2011. Friends of mine has opened accounts with Dukas with no problems.

-----

The key thing to know about the bill is, Brokers taking the other side of clients trades. US regulators feel bucket shop brokers manipulate the market which is what Franks-Dodd bill addresses. Bucketshops will have a hard time in the future as regulates are looking to change their business model towards something similar to Equities/Futures. Regulators are wanting the forex market to mimic ECN brokers business models, to where price is passed through to the real market and/or brokers match one clients trades with another clients trades, eliminating brokers taking the other side of clients trades. Its been deamed as unfair on the brokers (bucketshops) part.

Brokers like Interactive Brokers and other REAL ECN are (at the moment) excluded from Franks Dodds which is why those ECN brokers are able to continue to offer 100:1 or 200:1 leverage, even though most ECN only allow their clients to trade with no more than 50:1 leverage. Overseas ECN usually offers 100:1 leverage.

So, stick to an overseas broker that does not have any US ties. A lot of traders are moving to brokers located in Australia as most of AUS brokers don't have locations in the US. Though, most overseas brokers stopped accepting US clients because of the Frank Dodds bill, there are a few around the world that will cont to accept US clients.
  • #51
  • Oct 26, 2010 7:49am Oct 26, 2010 7:49am
Quoting Jhig
Its not illegal to trade with an offshore broker.

The Franks-Dodd bill makes it illegal for brokers who have locations in the US and who takes the opposite side of their clients trade, to be regulated with CFTC/NFA. This rule refers only to bucket shop brokers that has locations on US soil. This does not include bucket shop brokers who has NO locations or affiliations on US soil. You can trade with any bucketshop broker overseas as long as that broker holds not locations/affiliation to US.

FXCM and others who opened up shop overseas screwed...


Dodd-Frank requires any broker acting as the counterparty to a US retail forex transaction to be registered with a US regulator. You're correct that it doesn't make it illegal to trade with an offishore broker, but it puts the responsibility on the offshore broker to become regulated in order to accept those transactions.

Just because a broker has no ties to the US does not mean they are immune to US regulations in accepting US residents. The CFTC has a memorandum of understanding with many overseas regulators by which to enforce regulations. If you've been reading the forums, one broker in Australia with no ties to the US stopped accepting US residents for this very reason. It's also the same reason UK brokers will not allow US residents to trade CFD's. They would open themselves to a regulatory headache in the US. That's not to say some brokers may test this.

Interactive Brokers is regulated by FINRA and therefore subject to regulations by FINRA. You can do a search of FINRA on the forums to get a sense of what they have been suggesting regarding leverage. This comparison is apples to oranges.

I agree with you that regulators have taken a dim view of dealing desk firms because of the inherent conflict of interest that exists. I just posted a video of NDD execution on the FXCM Discussion thread if you want to take a look: http://www.forexfactory.com/showthre...96#post4123796

-Jason
  • #52
  • Oct 26, 2010 7:52am Oct 26, 2010 7:52am
Quoting Slack
Hi - It's not illegal just severely restricted. Most, perhaps all, legit retail brokers will not accept USA customers. But, offshore broker/banks are still open for business till July 2011.

Some info here http://www.greencompany.com/blog/index.php?postid=96
Oh great...
  • #53
  • Oct 26, 2010 9:17am Oct 26, 2010 9:17am
I have been following your posts concerning brokers for US citizens. What or who do you plan to trade with after July 2011? Will you consider opening an offshore trading entity-will that be legal for US citizens? Thanks....
  • #54
  • Oct 26, 2010 11:36am Oct 26, 2010 11:36am
Quoting John D
Not sure what you're getting at but no matter.
Not sure what he means either.
  • #55
  • Oct 26, 2010 5:38pm Oct 26, 2010 5:38pm
Quoting Jhig
The key thing to know about the bill is, Brokers taking the other side of clients trades. US regulators feel bucket shop brokers manipulate the market which is what Franks-Dodd bill addresses. Bucketshops will have a hard time in the future as regulates are looking to change their business model towards something similar to Equities/Futures. Regulators are wanting the forex market to mimic ECN brokers business models, to where price is passed through to the...
This is a great thing. I agree completely as I believe I have had the virtual market swept from underneath my feet. Trading in the real market is the way to go.

Quoting Jhig
Brokers like Interactive Brokers and other REAL ECN are (at the moment) excluded from Franks Dodds which is why those ECN brokers are able to continue to offer 100:1 or 200:1 leverage, even though most ECN only allow their clients to trade with no more than 50:1 leverage. Overseas ECN usually offers 100:1 leverage.
33:1 leverage, like futures contracts is just fine. It will prevent many novices form over-leveraging. So the deposit on 1 contract is $3,000 instead of $1,000, big deal really. Over-leveraging and over-trading is what brings down many traders.
  • #56
  • Edited 11:25pm Oct 26, 2010 10:59pm | Edited 11:25pm
It's become a can of worms after CFTC. It's not illegal for an american to trade with one, but as has been pointed out the memorandum of understanding with foreign regulators may or may not make the foreign broker refuse your business. GoMarkets (an STP broker therefore not taking the opposite side of client trades) in Australia cited that MOU in closing accounts owned by US citizens. One other Australian broker (ASIC regulated) gladly accepts new accounts from US citizens to this day. Another (also ASIC regulated, STP) continues doing business with US citizens only in accounts opened before October 18th, but won't accept new business. There are many more, undoubtedly with a patchwork of policies in the face of this. For a broker with no US presence, and no regulator to answer to (e.g., FXOPEN), there's no reason for them not to accept US business. But for a regulated broker, whether you can continue business with them all depends on their interpretation of their obligations under the memorandum of understanding, if any. About the only thing that can be said with certainty is there are no sanctions for you as a US citizen trading with a non-CFTC/NFA broker. The net result of this may be to drive US citizens to unregulated foreign brokers from regulated foreign ones, if only because US regulation can do nothing to keep US traders from doing that (no regulator, therefore no memorandum of understanding!). If there weren't still a regulated foreign broker that would have me, that's the path I'd follow, myself. If that's the net result, the CFTC has done US citizens a tremendous disservice.
  • #57
  • Oct 26, 2010 11:19pm Oct 26, 2010 11:19pm
Quoting Jhig
Its not illegal to trade with an offshore broker.

The Franks-Dodd bill makes it illegal for brokers who have locations in the US and who takes the opposite side of their clients trade, to be regulated with CFTC/NFA. This rule refers only to bucket shop brokers that has locations on US soil. This does not include bucket shop brokers who has NO locations or affiliations on US soil. You can trade with any bucketshop broker overseas as long as that broker holds not locations/affiliation to US.

FXCM and others who opened up shop overseas screwed...
Thank you all for clarifying this for me, I plan to open account with ITFX. I am currently with FXDD. Is this a good plan? Does anybody have experience or know about these brokers?
  • #58
  • Oct 26, 2010 11:35pm Oct 26, 2010 11:35pm
Never heard of them before, but just on the basis of what looks like a recurring issue, I would scratch them off my list. You should be able to inject or pull funds from you account any time, for any reason and without any major delays.

http://www.forexpeacearmy.com/public...vesttechfx.com
  • #59
  • Oct 27, 2010 1:42am Oct 27, 2010 1:42am
USA ban online betting/gambling too. Even offshore online casino refuse to accept US resident.
  • #60
  • Oct 27, 2010 8:19pm Oct 27, 2010 8:19pm
Quoting tx_sandman
It's become a can of worms after CFTC. It's not illegal for an american to trade with one, but as has been pointed out the memorandum of understanding with foreign regulators may or may not make the foreign broker refuse your business. GoMarkets (an STP broker therefore not taking the opposite side of client trades) in Australia cited that MOU in closing accounts owned by US citizens. One other Australian broker (ASIC regulated) gladly accepts new accounts from US citizens to this day. Another (also ASIC regulated, STP) continues doing business...

In my feeble mind it's like this:

As an example your current system makes 10% a month at 100:1 leverage before CFTC handcuff. You use leverage to play multiple positions and "scale in" also due to their stupidity of FIFO you have to go ALL OUT when you want to close any one particular symbol. But I could "have" lived with 100:1 perfectly fine.

But now 50:1 at same account size is now more risky. During certain times I may not have enough margin to open up trades I otherwise would have or reduce the ability to "scale in" as much as I would have. In order for me to continue trading the way I was up top would be to put in 50% more capital. Now my 10% return per month drops to 5% per month.

So I chose to go elsewhere and now I'm not happy even with 100:1. If you vote with your money, they will have no choice but to change. [Change or DIE what would you do?] Don't kid yourself that they won't. Remember the "No scalper allowed syndrome" just a bit over a year / year 1/2 ago. Now they welcome scalpers with open arms. The scalper is like an affair with the devil I guess. You either luv them or loathe them?

It's the lure of "EASY MONEY" that's got a very strong appeal. Don't think for one minute they won't remember the good ole days of 400:1 leverage. Based on the required reports now nearly all brokers have a pool of roughly 30% of traders that are profitable.

This is a "zero-sum" market. The money that makes up what those 30% make is what the 70% lost and likely less than that because not all of them are likely the counter party to the trade so says the CFTC.

Now that 50:1 is in place don't expect those winner percentages change much.

There's also one more thing you can do come Nov 2 me little ghouls and gobblins... vote out every single incumbent. Full swoop. Especially Frank~Dodd. Give em just a little taste of that 9%+ unemployment rate.
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