FXCM Discussion | Page 218 | Forex Factory

Options

Go to
Permalinks
Print Thread

Related Instruments

EUR/JPY

Similar Threads

FXCM with Sierra Charts - Discussion and alternatives 8 replies

Elliott Waves discussion 4 replies

FXCM gets another CFTC fine, while Drew Niv leaves FXCM UK board 17 replies

Euro/Dollar discussion 9 replies

Forward Testing Discussion Thread 241 replies

Attachments: FXCM Discussion
Exit Attachments

FXCM Discussion

  • #4,341
  • Feb 26, 2014 5:47am Feb 26, 2014 5:47am
Quoting PoundTrader
{quote}same stuff the u.s. regualator's fine them for back around the same time frame
For Immediate Release
August 12, 2011

NFA levies $2,000,000 monetary sanction against FXCM and orders refunds to customers

August 12, Chicago - National Futures Association (NFA) has issued a Decision imposing a $2,000,000 monetary sanction against Forex Capital Markets LLC (FXCM) in settlement of a Complaint issued by NFA's Business Conduct Committee on August 12, 2011. The Complaint cited FXCM for retaining gains derived from asymmetrical positive price slippage; failing to adopt or carry out adequate procedures to ensure the efficient execution of all customer orders; failing to treat all customers equally when giving price adjustments; failing to adequately investigate suspicious activity in several customers' accounts; and - together with its principal Dror Niv - failing to supervise. FXCM is a Futures Commission Merchant, Retail Foreign Exchange Dealer, and Forex Dealer Member located in New York, New York.

In addition to the $2,000,000 monetary sanction, FXCM must credit the accounts of its customers the amount of asymmetrical positive slippage which its customers experienced on their trades from and after June 18, 2008 and provide verification to NFA of these credits. In the future, FXCM is prohibited from engaging in price slippage or margin liquidation practices, as described in the Complaint. FXCM must also enhance existing procedures to ensure efficient execution of customer orders and compliance with NFA's anti-money laundering requirements.
  • #4,342
  • Feb 26, 2014 6:08am Feb 26, 2014 6:08am
i no longer think FXCM is doing the same thing after getting busted, they got busted paid the fine and move on with there daily business
  • #4,343
  • Feb 26, 2014 6:24am Feb 26, 2014 6:24am
LOL it gets better:

MARKETS
FXCM CEO says he expects others to be fined
24 minutes ago
The head of online foreign exchange services provider FXCM Europe has characterised the hefty fine his firm received on Wednesday as part of a wider problem in the industry, saying he expects other providers to be hit.
The Financial Conduct Authority, the UK's main markets watchdog, penalised FXCM £4m for withholding as much as £6m in profits that should have been passed on to its clients.
The FCA claimed that FXCM kept the profits from favourable market movements between the time of clients' orders and the time of their execution, while any losses were passed on to customers in full – a practice known as "asymmetric price slippage".
FXCM has also agreed to repay its customers as much as $10m as part of the settlement.
Chief Executive Officer Brendan Callan told the FT's Vanessa Kortekaas that rival online FX services were taking "ambiguous and the vague interpretations" on best execution requirements in the market.
"We know point blank many of our competitors still today don't comply with what the FCA is deeming the appropriate interpretation of the.. standards," Mr Callan said.
"The FCA has started a thematic review. I'm waiting to see the results I'm certainly expecting that quite a lot of firms will be fined and sanctioned as well…and to a larger degree [than FXCM]."
  • #4,344
  • Feb 26, 2014 6:32am Feb 26, 2014 6:32am
brokers been doing this for years not just FXCM, there have been other forex broker here in the u.s. that got busted doing the same thing, nothing new just that FXCM has the bigger name
  • #4,345
  • Feb 26, 2014 7:19am Feb 26, 2014 7:19am
Quoting PoundTrader
brokers been doing this for years not just FXCM, there have been other forex broker here in the u.s. that got busted doing the same thing, nothing new just that FXCM has the bigger name
It does seem like that. I have experienced this "asymmetric price slippage" with other brokers. It's how they keep their spreads low.
Gone to a better place
  • #4,346
  • Feb 26, 2014 9:16am Feb 26, 2014 9:16am
Quoting TranceTrader
Jason do you have a comment on this?
Hi TranceTrader,

Our system was updated in 2010 to pass all potential price improvements to clients, and our clients have received the benefit of price improvements since that time. In our official statement, we mentioned that over the past 6 months alone FXCM clients have benefited from over $15 million in price improvements.

Like the NFA action discussed in 2011, this has to do with positive slippage not being passed on in full when transactions were offset with liquidity providers prior to the 2010 update.

It's important to note that FXCM is currently one of the only firms in the industry to give price improvements on market and limit orders. I have mentioned over the past couple of years how many traders with other brokers currently experience re-quotes if the market moves in their favor, but often don't receive re-quotes for the better price when the market moves against them. Earlier this month in their newsletter, the FCA announced a thematic review of best execution, which we welcome to introduce best execution standards across the industry that benefit traders in the same way our traders have benefited for years.

Taking a look at FXCM price improvements today…

Analyzing a total of 43,128,901 forex and metal trades executed by FXCM during the six month period of August 2013 -January 2014, 6,391,641 or 15% of the trades benefitted from price improvements totaling $15,726,247. Of the total number of trades executed, 4,648,672 trades were limit and limit entry orders. Sixty percent of those limit and limit entry orders were positively slipped providing clients $7,296,520 in price improvements. Of the total trades executed in the six month period of August 2013 - January 2014 clients were executed at their requested price 73% of the time with no slippage. Only 12% of orders were slipped negatively. As mentioned before, FXCM is currently one of the only firms in the industry to give price improvements on market and limit orders.

At FXCM, there are no re-quotes and traders benefit from the positive slippage in full whenever it's available.
  • #4,347
  • Feb 26, 2014 9:25am Feb 26, 2014 9:25am
To those actually use FXCM, you will actually see these slippage correction orders in your account history as well. It will be a transaction type of 'balance' with a comment about positive or negative slippage. I generally experience these with limit orders and on stops.

Jason ~ Out of curiosity, is there a reason why swap is included as a separate transactions rather than part of the open order? This is the first time I have ever experienced swap credits/withdraws in this manner before. With all the slippage and swap transactions my stat crunching applications get a little... confused. Obviously not a huge deal, just more curiosity than anything about this.
  • #4,348
  • Feb 26, 2014 9:57am Feb 26, 2014 9:57am
Quoting Venice
Out of curiosity, is there a reason why swap is included as a separate transactions rather than part of the open order? This is the first time I have ever experienced swap credits/withdraws in this manner before. With all the slippage and swap transactions my stat crunching applications get a little... confused. Obviously not a huge deal, just more curiosity than anything about this.
This has to do with how swap (AKA rollover interest in Trading Station) is tracked in our back office. Based on your comments about account history, it sounds like you use the MT4 platform. It might be easier for you to follow the rollover, if you log into Trading Station. You can use the same login and password that you use on MT4. On the Trading Station platform, you will see there is a separate column for rollover interest in the Open Positions window. This is to differentiate rollover interest from profits or losses due to changes in the currency price which are reflecting in the P/L columns.

If you click on the Report button on Trading Station, you can view your Combined Account Statement, which shows rollover interest in the Account Activity section. Alternatively, you can access this same report by logging into MyFXCM.com with your MT4 login details. You can choose to display the report in Excel format, which might coming in handy for your stat crunching applications, because then you can isolate the "Rollover Fee" to track the amount you make or lose due to this interest.
  • #4,349
  • Feb 26, 2014 10:16am Feb 26, 2014 10:16am
Jason I have replied to your comments on a previous forum which you have conveniently ignored. I will paste my reply to your template reply above here and maybe you can answer it.


Pasted from trade2win.com forum:

Quote
Jason why have the people who were involved in this abhorrent breach of customers trust all not resigned? Do you honestly think that any customer of yours can have faith that you wont simply just repeat the fraud you were caught carrying out?

Surely you're personally ashamed to be associated with a company who would carry out this type of activity and still employ the people responsible at the very top... to this day?
  • #4,350
  • Feb 26, 2014 11:16am Feb 26, 2014 11:16am
Cannot access ts desktop, error 2048, also cannot access ts web from chrome or ie. Got email with tracerroute link, cannot access tracerroute link. My diagnostics says your server is not responding. Now I've been asked to reset my modem by tech. Really?


Now the tech guy is asking a tech specialist what is going on.

I was told there are no server issues...................well maybe I am reporting one.
  • #4,351
  • Feb 26, 2014 11:25am Feb 26, 2014 11:25am
Quoting calderone
Cannot access ts desktop, error 2048, also cannot access ts web from chrome or ie. Got email with tracerroute link, cannot access tracerroute link. My diagnostics says your server is not responding. Now I've been asked to reset my modem by tech. Really? Now the tech guy is asking a tech specialist what is going on. I was told there are no server issues...................well maybe I am reporting one.
Now, I magically connected with your server after an hour of this back and forth stuff. This isn't the first time this has happened. Please just tell me when your server is off kilter, I can deal with that. I lose trust when you try to tell me it's me and I am the only person on the planet with a problem.

I was told that they didn't do anything on their end to fix this issue. It just resolved itself.

I don't like having no access for unknown reasons.
  • #4,352
  • Feb 26, 2014 12:33pm Feb 26, 2014 12:33pm
FXCM UK announces 16.9 mil settlement:

http://forexmagnates.com/fxcm-uk-ann...tric-slippage/
  • #4,353
  • Feb 26, 2014 12:41pm Feb 26, 2014 12:41pm
This is why spot brokers pop up all over the unregulated world. Its like a machine that prints free money for them directly from your wallet.
  • #4,354
  • Feb 26, 2014 12:50pm Feb 26, 2014 12:50pm
But just how fukcin much do they want and need? All they have to do is route the orders to market but it's not enough, they can't bear not being market makers or having a dealing desk so the temptation to stiff proves just too much. The ECN STP model just doesn't make enough therefore they need to look for..ahem...'enhancements'. It's not enough that 96%+ lose they want those losses too...


Quoting nonlinear
This is why spot brokers pop up all over the unregulated world. Its like a machine that prints free money for them directly from your wallet.
  • #4,355
  • Feb 26, 2014 1:04pm Feb 26, 2014 1:04pm
I think the reason for this crap, with all brokers that the orders do not come to the market,market orders under 1 lot in any case.
Maybe only 10 or 100 Lot.
So all brokers are on the hunt for small customers.
I think all brokers where you can open an account under 10,000 bucks, are cheaters. With more or less luck.
  • #4,356
  • Edited 2:15pm Feb 26, 2014 1:59pm | Edited 2:15pm
Quoting TranceTrader
Jason do you have a comment on this? Source (www.ft.com) FCA fines FXCM £4m for keeping clients' profits 28 minutes ago Are UK regulators getting serious about protecting people who may be getting ripped off in over-the-counter foreign exchange dealings? Judging by the size of Wednesday's fine against FXCM, a relatively well-known operator in the market, the scrutiny is ramping up. The Financial Conduct Authority, the UK's main markets watchdog, has levied a £4m fine on FXCM for withholding as much as £6m in profits...
So they DID on purpose set negative slippages against traders. Traders have been crying foul over this practice for years and they have denied it always saying "it's all part of the market movement" blah blah blah. They should be going after all the MM's one by one and help the traders to get their money back. Eventually everybody will be trading via STP ECN and DMA. I am glad customers of FXCM are able to recover some of their money.
Make your losses in demo. Earn your profits live.
  • #4,357
  • Feb 26, 2014 2:11pm Feb 26, 2014 2:11pm
Kudos to the regulators for going after this crap. I am sure it will still go on to some degree in the US and UK, but this is a deterrent, for certain.
  • #4,358
  • Feb 26, 2014 2:52pm Feb 26, 2014 2:52pm
Quoting TranceTrader
Jason why have the people who were involved in this abhorrent breach of customers trust all not resigned? Do you honestly think that any customer of yours can have faith that you wont simply just repeat the fraud you were caught carrying out?

Surely you're personally ashamed to be associated with a company who would carry out this type of activity and still employ the people responsible at the very top... to this day?
Hi TranceTrader,

I've posted this same response to you on the Trade2Win forum.

Trust is very important for forex traders whether it be related to trading execution, safety of funds, or any other area, and we have always taken steps to be as transparent as possible and lead the industry in transparency. If an important issue comes up, we address it head on and do not disappear as you can see some of our competitors do when difficult and potentially embarrassing issues arise.

As of the latest numbers, traders hold $1.264 billion in client funds with us, and it's important that we maintain an open dialogue to address these issues. That's why in 2010, when this issue was originally discussed with our regulators, we updated our system to provide price improvements for all order types, and our clients have benefited from receiving price improvements in the years since.

FXCM is currently one of the only firms in the industry to give price improvements on market and limit orders, and we look forward to the FCA's thematic review to address concerns we have had during the past several years, since our clients have received the benefits of positive slippage and while traders at some other brokers have not. It's a question every trader should pose to their broker.

Our goal in providing a transparent and honest system is also what led us to launch No Dealing Desk forex execution which we believe gives traders a more fair and transparent system compared to a dealing desk platform. While there have been bumps along the way addressed with our regulators, the transparency of the record keeping of our system is what allows our regulators to monitor our trade execution to ensure fair trade practices, and we look forward to the same standards being applied across the entire industry.
  • #4,359
  • Feb 26, 2014 3:09pm Feb 26, 2014 3:09pm
Quoting Forexia
So they DID on purpose set negative slippages against traders.
Hi Forexia, that's not the case. Like the NFA action discussed in 2011, this has to do with positive slippage not being passed on in full when transactions were offset with liquidity providers prior to the updates we made in 2010 to pass on all positive slippage in full to clients. As a result of those changes, FXCM is currently one of the only firms in the industry to give price improvements on market and limit orders.

I've mentioned over the past couple of years how many traders with other brokers currently experience re-quotes if the market moves in their favor, but often don't receive re-quotes for the better price when the market moves against them. Earlier this month in their newsletter, the FCA announced a thematic review of best execution, which we welcome to introduce best execution standards across the industry that benefit traders in the same way our traders have benefited for years.
  • #4,360
  • Feb 26, 2014 3:20pm Feb 26, 2014 3:20pm
I think the real question here, Jason, is why this happened in the first instance and under whose watch.
9 traders viewing now