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SEC bans Broker-Dealers from retail forex transactions

  • #21
  • May 26, 2016 3:29am May 26, 2016 3:29am
Quoting shrike
Interactive brokers will be the most notable victim of this.
thats the first broker i thought about because most forex brokers only deal in forex, i think tradestation sold there retail forex broker business because they seen this coming
  • #22
  • May 26, 2016 3:32am May 26, 2016 3:32am
Quoting shrike
The land of the free..
where not free we just don't know it yet
  • #23
  • Edited 3:31pm May 26, 2016 3:19pm | Edited 3:31pm
Some good news guys: I just spoke with IB and they have confirmed this: IB will NOT be impacted by this stupid ban coming this July. They are aware of this notice but they are making structural changes in order that existing FX customers WILL be able to continue to trade FX with IB UNINTERRUPTED. BUT this might be just for Canada as I spoke with a Canadian manager. For US traders , IB MAY still be affected by the ban.
Make your losses in demo. Earn your profits live.
  • #24
  • May 26, 2016 9:33pm May 26, 2016 9:33pm
Quoting Forexia
Some good news guys: I just spoke with IB and they have confirmed this: IB will NOT be impacted by this stupid ban coming this July. They are aware of this notice but they are making structural changes in order that existing FX customers WILL be able to continue to trade FX with IB UNINTERRUPTED. BUT this might be just for Canada as I spoke with a Canadian manager. For US traders , IB MAY still be affected by the ban.
  • #25
  • May 26, 2016 9:44pm May 26, 2016 9:44pm
Quoting Forexia
Some good news guys: I just spoke with IB and they have confirmed this: IB will NOT be impacted by this stupid ban coming this July. They are aware of this notice but they are making structural changes in order that existing FX customers WILL be able to continue to trade FX with IB UNINTERRUPTED. BUT this might be just for Canada as I spoke with a Canadian manager. For US traders , IB MAY still be affected by the ban.
Thanks!
  • #26
  • May 26, 2016 10:19pm May 26, 2016 10:19pm
Like I said:

Quoting Forexia
BUT this might be just for Canada as I spoke with a Canadian manager. For US traders , IB MAY still be affected by the ban.
Until this is confirmed for IB USA, if I were a US trader, I would still do some research and make preparations JUST IN CASE IB USA is still affected by this ban, I would be prepared to switch over at a moment's notice.
Make your losses in demo. Earn your profits live.
  • #27
  • May 27, 2016 11:00pm May 27, 2016 11:00pm
I don't believe this thing will get enforced. Oanda and FXCM are too big for the CFTC just to come out of the blue and destroy them.

Quoting PoundTrader
LeapRate Exclusive LeapRate has learned that the US Securities and Futures Commission (SEC) has quietly filed a notice indicating that as of July 31, broker-dealers will no longer be able to engage in leveraged foreign exchange transactions with retail traders. The ban includes those brokers-dealers which are dually registered with the US Commodity Futures Trading Commission (CFTC) as Future Commission Merchants (FCMs). So what does this mean for the 'FCM-only' brokers in the US, such as FXCM, Forex.com and Oanda? And might the effective regulators...
  • #28
  • Jun 10, 2016 12:34pm Jun 10, 2016 12:34pm
Quoting mitch77
If this is going to affect FXCM and Gain, then wouldn't their share prices have plunged? Which they have not. 80% of their business surely must be US based!
Great point Mitch
But, what exactly does it mean for Forex retail traders. Is it time to switch to forex futures?
  • #29
  • Jun 10, 2016 1:28pm Jun 10, 2016 1:28pm
Quoting JohnTR
{quote} Great point Mitch But, what exactly does it mean for Forex retail traders. Is it time to switch to forex futures?
It means it's time to switch to an offshore broker. Find one you trust, I have and been with them over 2 years, I withdraw every week with no issues. I know, your money is not protected, but it's not in the US either. Benefit is you may keep the majority of your trading capital safely in your own bank as you only need 10% with the broker due to the more favorable margin requirements. For example, if you want to trade 6 lots of GBP/JPY with a 50 pip stop, you risk aprrox. $3,000, so you transfer $3,000 to broker. In the US, you need to put up $24,000 JUST FOR MARGIN even though you are only risking $3,000
  • #30
  • Jun 10, 2016 5:25pm Jun 10, 2016 5:25pm
It is a good tactic on the surface, but you're still risking the same amount. If your trade turns catastrophic, you will get a margin call and still have to pay up. You're still liable for all losses, and they can go well beyond your deposit amount. You'll also pay more for commissions, by not having a fully funded professional level account imo. Forex is just the wild west and I still think your method is a good tactic though. I'm very leary of putting my money in any forex brokers hands, for fear of them closing shop or manipulating my orders.
  • #31
  • Jun 10, 2016 8:17pm Jun 10, 2016 8:17pm
Quoting JohnTR
It is a good tactic on the surface, but you're still risking the same amount. If your trade turns catastrophic, you will get a margin call and still have to pay up. You're still liable for all losses, and they can go well beyond your deposit amount. You'll also pay more for commissions, by not having a fully funded professional level account imo. Forex is just the wild west and I still think your method is a good tactic though. I'm very leary of putting my money in any forex brokers hands, for fear of them closing shop or manipulating my orders....
Yes, that is why I trade the way I do. In my example, if broker closes shop, I'm out $3,000, if US broker closes shop, I'm out $24,000. It's a no brainer.
  • #32
  • Aug 12, 2016 1:00am Aug 12, 2016 1:00am
Well Gentlemen, it in fact seems to be true that IB got caught in this ordeal/regulation and cant offer any leverage to what seems like 99.99% of its small retail clients in the Forex Space. I just read this email(pasted below) from them confirming that one needs $10MM!!! in assets to get any kind of leverage(which is absolutely crazy!), starting in Sept 2016.

"Effective September 1 2016, Interactive Brokers will require that only accounts held by "Eligible Contract Participants" may open leveraged forex positions.

An “Eligible Contract Participant" generally is an individual or organization with assets of over $10 MM (or $5 MM if trades are hedging). See KB2731 for the definition of an Eligible Contract Participant.

If you are or may be an “Eligible Contract Participant”, please review KB2732 for instructions on how to complete a required questionnaire to continue trading leveraged forex.

If you do not qualify as an “Eligible Contract Participant”, after September 1, 2016 you will be able to close your existing leveraged forex positions but you will not be able to do any additional leveraged forex trades."



I cant believe IB as a supposed ECN didnt see this coming and do something about the way it is structured in the forex space to solve this issue! Well time to look elsewhere for another trustworthy forex dealer for all IB retail traders who do not own $10MM in assets (like 99.99% of us).
  • #33
  • Aug 12, 2016 2:59am Aug 12, 2016 2:59am
And then there were 3.......The NFA is well on it's way to it's goal of eliminating retail forex in the US. The regulaltions are only there to do that, while they tout them as protection for us. Everyone needs to go offshore, there are several great, trustworthy brokers. The US no longer has a true ECN offering. What a joke.
  • #34
  • Aug 12, 2016 5:23am Aug 12, 2016 5:23am
Quoting pipmaster77
And then there were 3.......The NFA is well on it's way to it's goal of eliminating retail forex in the US. The regulaltions are only there to do that, while they tout them as protection for us. Everyone needs to go offshore, there are several great, trustworthy brokers. The US no longer has a true ECN offering. What a joke.
they want u.s. resident to trade currency futures and not spot forex
  • #35
  • Aug 14, 2016 5:35am Aug 14, 2016 5:35am
Quoting pipmaster77
And then there were 3.......The NFA is well on it's way to it's goal of eliminating retail forex in the US. The regulaltions are only there to do that, while they tout them as protection for us. Everyone needs to go offshore, there are several great, trustworthy brokers. The US no longer has a true ECN offering. What a joke.
Im curious who are the 3 your referring to ?
Learn, a forex trader must, unlearn and relearn he will.
  • #36
  • Aug 14, 2016 5:54am Aug 14, 2016 5:54am
Breaking News: Belgium bans all leveraged Forex, CFD and

http://www.forexfactory.com/showthread.php?t=602715
  • #37
  • Aug 14, 2016 6:21am Aug 14, 2016 6:21am
Quoting COGSx86
{quote} Im curious who are the 3 your referring to ?
Trader's Way, FXChoice and AssetsFX.
  • #38
  • Aug 14, 2016 6:35am Aug 14, 2016 6:35am
Quoting pipmaster77
{quote} Trader's Way, FXChoice and AssetsFX.

Im sorry, when you said " And then there were 3" I thought you were referring to US brokers ?

Considering the following:

Traders Way is located in Cyprus
FXChoice is located in Belize
AssetsFX is located in Finland.
Learn, a forex trader must, unlearn and relearn he will.
  • #39
  • Aug 14, 2016 6:52am Aug 14, 2016 6:52am
Quoting COGSx86
{quote} Im sorry, when you said " And then there were 3" I thought you were referring to US brokers ? Considering the following: Traders Way is located in Cyprus FXChoice is located in Belize AssetsFX is located in Finland.
Oh, I know where they are located. I only use Trader's Way as I only need to keep 20% of my forex capital with the broker as they do not require the insane margin the US brokers do. So, in reality, my money is safer than with any US broker as they do not offer any protection of funds within their regulations. Not to mention, I trade an ECN , where all of the remaining US brokers are market makers, a clear conflict of interest. They will freeze platforms, delay execution, hunt stops whatever it takes to get YOUR money. No Thanks.

The 3 in the US are forex.com, FXCM and Oanda. Look up some reviews on those 3.
  • #40
  • Aug 14, 2016 6:55am Aug 14, 2016 6:55am
Interactive Brokers have stopped offering leveraged FX trading
practising coitus interruptus
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