Quote:
Originally Posted by WhipSawFX
I have made some very good points with reference to Refco on the OANDA forum. The net capital requirements wouldnt have helped in the case of the only significant bankruptcie to hit the forex market in its entire history, so how is tightening the net capital requirements going to help it now ... Thats right, its not, its simply going to move funds to the bigger operators who infact are more likely to be hit by insolvency if Refco is anything to go by.
I also pointed out on the OANDA forum that the Net capital requirements have historically been very dynamic, with OANDA's number fluctuating by over $30M over the past year. When they are clearly not in any way concievable having any problems.
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Well looks like I have made a new friend. Let me correct you on a couple points.
1) RefcoFX was not regulated. Refco LLC was regulated and the customers got their money back. Regulation matters. That's why the customers of RefcoFX in Hong Kong and Canada also got their money back. The Refco case is very complicated and since you don't know too much about it I suggest you not use them to "build your case" since you don't know too much about it.
2) The issue is not "dynamic capital numbers" the issue is firms that don't have enough money to properly run a forex operation. The NFA is saying they don't believe firms under $5 million are properly equipped to do so. Thus they want to raise the requirement. The record, as I have shown on this thread, backs their assertion up.