Thanks, Redhunter
[B]VantageFX[/B] (Australia), [B]NordFX[/B] (Mauritius) and [B]Varengold[/B] (Germany) have been on our “no” list (page 3) for several months.
[B]HMS LUX[/B] (Luxembourg) is a new name, which you are mentioning for the first time on this thread. I will add them to the “no” list (later this weekend).
When I update the list, I will move it to the end of this thread, where it can be found more easily.
I was informed yesterday via email, that Migbank will no longer be accepting U.S Clients, and their current U.S. Clients accounts, will be closed out, by July15, 2011
Add Mig Bank to the list, of those no longer Accepting U.S. Clients. I got the email yesterday, my account has to be closed by July 15, 2011… They are no longer doing business with U.S. Clients
It’s not that they’ve just been forced or recently decided to do so - foreign banks providing brokerage services (like Dukascopy, MIG Bank etc) were granted a CFTC extension last year until July, 2011 which is now coming in force.
It’s interesting to see how they all chose to comply despite being foreign entities (and wholly foreign-based in many cases). Just goes to show that the almighty Uncle Sam rules nearly the entire world these days - apart from only Russia and several shady offshore jurisdictions.
It’s hard to do backtests with their MT4 platform because of the currency pairs’ names being followed by suffixes (e.g. EURUSDcf, GBPUSDcf). That’s because of CitiFXPro using the Boston Technologies bridge which I personally dislike.
If I were to go with a US-based brokerage, those would be MBTrading.com and Oanda.com - they have even lower spreads, low account opening minimums, and no suffix hassle with backtests.
ATCBrokers.com is another good choice if the availability of micro lots is not important to you (micro lots with ATC start at 0.05 while with Oanda and MBTrading they start at 0.01). Also, unlike Oanda and MBTrading, ATC has a high account opening minimum - similar to CitiFXPro. Alpari US is rather solid too, but their spreads are still higher than those of MBTrading or Oanda.
If one still wants to enjoy the benefits of higher leverage, forming an offshore company with a nominal director/shareholder and an overseas bank account is the only real option at this time. It comes at about two thousand dollars total, yet it’s better than setting up an account with a non-complying offshore broker knowing that it can be closed down anytime and you will be left on your own to deal with your problem. If there were solid brokerages in Russia accpeting US customers, one could have given it a try, but apart from Alpari (which has chosen not to take US clients at any of their branches other than the US one) there are none. All those offshore brokerages in classic tax havens like Mauritius, the Seychelles, Hong Kong, Panama, the BVI etc that still take US clients appear to be effectively Russian-controlled.
Regarding an offshore corporation, However according to GreenTrader Weblog
Dummy offshore corporations: Not a good idea
Even if you hear from some that the CFTC may focus its enforcement efforts against foreign unregistered intermediaries rather than on individual traders, it’s important to understand the CFTC considers evasion a “prohibited transaction.” Forming a dummy offshore corporation to open a retail off-exchange forex trading account with an unregistered offshore bank or broker is considered evasion, according to the CFTC. Attorneys, CPAs and financial advisors who suggest using dummy corporations to evade these CFTC rules may face challenges by their professional license boards and bars on infractions to their ethical codes of conduct.
If you are foolish enough to use a dummy offshore corporation in this regard, you still need to disclose your American ownership of the corporation to your foreign broker, who may deny the account treating it as an American-owned account. If you don’t make that “know the client” disclosure, the broker may have grounds to take action against you.
Regarding the cost, it appears that Investors Europe - Offshore Stock Brokers Gibraltar online trading platforms FX Futures Stocks CFDs: Offshore Stockbrokers will set up a segregated nominee trading account for free if you trade with them, although I do not know for sure that this applies to U.S. residents or what their spreads are like.
In my post, I was talking of an offshore company with [B]a nominal directror/shareholder[/B] which you control through a power of attorney only. The Green Trader site talks of an [B]American-owned[/B] offshore company. Moreover, the choice is always yours: to either take that path or open an account with a US broker. Everything in the world has its downsides.
The nominee shareholder could satisfy the broker and local laws in the offshore country, but under U.S. law you would still own the company and so it would be U.S. owned. U.S. law would look to the real shareholders.
Nevertheless I absolutely agree with you that a foreign corporation could work. I might suggest making it a real corporation though, rather than a dummy one.
Overall I agree with your points - I just wanted to point out a possible downside.
Hi Clint
Does anyone have an estimate as to how large is(was) our retail forex community?
There is, I have been given to understand, exclusions to these CFTC rules based on the size of the account. My letter of cancellation from GO Markets mentioned 10M, but that may be only Australia.
Here’s the thing: I am trying to get as much info as I can for a letter of complaint to several outlets on a semi-political basis I want to broaden this issue to include the theme of, creeping Government restrictions on small business, under the radar Government interference with freedom of the internet…Well, you get the point.
This is a political year, and I think this is an issue that could be used to bring much wider attention to what the CFTC is doing, and I suspect the CFTC does NOT want public attention. They are doing something that is unfair, worthless ,aimed only at the small person, and discriminatory against it’s own residents. If publicized, it will play well with the general public. Especially in an election year.
If this approach seems slimy to you, it is merely the best, hopefully, defense against what I consider a very slimy organization.
As valuable as this thread has been, and is, I don’t think we will accomplish what we want talking to one another.
I am traveling right now due to a family medical emergency, and I couldn’t complete this before the final rules (interpretations) are released on the 16th anyway, so I am gathering as much information as I can to put this together. then I will see if past political contributions carry any weight
If it fails, at least we tried.
Any solid information will be welcomed,
John
What’s a real shareholder? With a nominal shareholder, there are no other shareholders, but the nominal ones. Holding the shares is their very purpose, while you act on behalf of the company through a power of attorney. If the US government thinks you’re the shareholder, they need to prove it with documents (such as shares on your name) of which there won’t be any.
Also, what’s a real corporation? If it gets as real as acting as its director/shareholder yourself, it won’t get you anywhere, because it will be legally US-owned.
U.S. law looks to beneficial ownership, not nominal ownership.
See Shieldor Asset Protection - FSL SE-63
#729: 07-28-09 UBS CLIENT PLEADS GUILTY TO FILING FALSE TAX RETURN, HID $8 MILLION IN SECRET SWISS BANK ACCOUNTS
As to a foreign corporation in which you are listed as shareholder, it should be accepted by foreign brokers. Under all international treaties and U.S. law, a corporation is a separate legal person and is considered a resident of the jurisdiction in which it is incorporated. So I do not think there is a need for a nominee setup, which may give rise to an inference of evasion. It could still be ok as long as you file all U.S. tax and information returns reflecting your beneficial ownership of the corporation.
John, you can contact the US National Futures Association at <[email protected]> with an inquiry on the current volume estimate for the US retail Forex industry along with any other questions you might have. The first-hand information from them is always the most reliable one.
I admit, it makes sense to me as well. I see no reason why a foreign corporation with the US shareholders should be prohibited from setting up a trading account with a foreign brokerage, provided the shareholders duly pay taxes to the US goverment.
Also “WH SelfInvest”, think you might have missed that one. They are not accepting US Peeps.
Thanks. So far I really like the approach of investors-europe.com which offers nominee trading accounts for their customers. They also offer an ability to set up a foreign corporation with their assistance. IMO, nominee trading accounts might soon become a solution for many foreign brokers that don’t want to lose their chunk of the US market because of the US CFTC.
Note re investors-europe:
You may not even need a nominee with them (unless their website is out of date).
See
The SEC’s interpretation of U.S. federal securities laws limits Non U.S. Broker-Dealers to working with those permanently resident outside the USA. Non U.S. broker-dealers cannot approach and/ or solicit U.S. resident persons because an Internet Web site is interpreted by the SEC as being the same as a telephone call to a client.
Non U.S. broker-dealers maintaining an Internet Web site can thus only accept a U.S. person (defined as one who is permanently resident inside the USA) if he or she has not been solicited either directly or indirectly through accessing their web sites under the ‘unsolicited’ exemption Rule 15a-6. U.S. customers wanting to work with Non U.S. broker-dealers can thus only approach Non U.S. broker-dealers under Rule 15a-6 if they have not been to their web sites and should be prepared to certify this fact in writing to ensure compliance with applicable law.
This limitation with respect to U.S. Persons does not apply to Spot Forex, which is currently an unregulated financial product under MiFID.
So if people approach them, they may be well advised to do so other than via their web site (e.g. call them at +1 (214) 556-6382), and to be prepared to certify that they have not visited their web site. This is not currently necessary for Forex, it appears, but you might want to trade stocks as well.
If all of that falls through, it looks as if they can still set you up through a nominee at no charge.
Now, I have not actually checked with them yet that they will still take U.S. clients.
Hello, John
I presume that you want to know how many retail forex traders there are in the U.S. If the NFA cannot provide the info you want, you might be able to make your own estimate.
The largest U.S. forex broker is FXCM. According to Jason Rogers, the FXCM rep here on the Forum (he speaks officially for FXCM), as of 5 or 6 months ago FXCM had 174,000 retail customers. Note that these are all forex customers, as FXCM does not act as dealer/broker for other types of securities.
If you can get a reasonable estimate of FXCM’s “market share” — let’s say FXCM has 13% of all the retail forex customers in the country (I’m pulling that number out of the air) — then, a simple calculation will give you your answer.
FXCM is now a publicly-traded company, so they are obliged to make public a lot of info that might help you.
You might try just asking Jason Rogers to find the info for you, or to put you in touch with people at FXCM who can help you. You could post a question to Jason on one of his threads, or start a new thread in the FXCM sub-forum. Or send Jason a PM.
Here’s a link to one of Jason’s posts (the one where he mentioned the 174,000 figure) —
Thanks Clint,
That will help. I’m just trying to get an idea of the number potential voters that are being affected when I contact some of these folks.
According to posts elsewhere ACM/Swissquote is no longer accepting U.S. customers.
Thanks for the bad news. I’ll look into this.
About 10 months ago, I had some lively telephone conversations with an American guy working for ACM in Switzerland as their service/support rep for U.S. customers. He was eager to open an account for me, and he was very clear that ACM did not answer to the CFTC.
How things have changed in less than a year!