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.
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.
You may not even need a nominee with them (unless their website is out of date).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.
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.
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.
Below is a transcript of my conversation with investors-europe.com based in Gibraltar. They offer the MetaTrader4 platform, some of the lowest spreads on majors in the industry, a high leverage of up to 1:400, micro lots starting at 0.01, no FIFO/hedging restrictions, and allow expert advisors. Most importantly, they accept US customers as described in the transcript of our conversation below.
You:
Do you accept US customers for spot Forex trading at investors-europe.com? What is the current minimal deposit for account opening?
John:
How May I help You?
You:
Hi, John. Do you accept US customers for spot Forex trading at investors-europe.com? What is the current minimal deposit for account opening?
John:
250 usd
You:
why does it say “Minimun Deposit for ECN/STP Accounts- $2000” on your page?
John:
it has been reduced…the web has to be updated
You:
and do you accept US customers?
John:
it depends on how you found us. we can except Us clients if they are not solicited by us. how did you hear about us?
You:
found your website in a mailing on Yahoo Groups
John:
ok then. we have a disclaimer that you will have to sign saying that we didnt approach you you and then you can open an account with us
John:
if you email me at <[email protected]> with your details i will forward to you the disclaimer and the online application link so we can get the ball rolling for you
You:
thank you, will do. thanks for your answers.
John:
no problem. im happy to help
John:
look forward to your email, have a nice day
You:
thanks, you too
Excellent - thanks for checking with investorseurope.
It may be safest, I think, not to mention the word website at all since their web site says that they cannot accept U.S. clients if they come via the web site (since the U.S. considers the web site a form of solicitation).
That’s what the broker has the disclaimer to be signed for. One can always say he/she found the broker’s number in Gibraltar’s phonebook and called the broker at that number.
A word of caution - let’s see if this holds up after July 16th.
As of right now, even U.S. SEC-regulated broker-dealers will not be able to do forex after the 16th. This is up in the air until the last minute. Obviously some reprieve is going to happen, otherwise IB, TD Ameritade, etc. cannot do forex after July 16.
I am not sure that anyone knows what happens after July 16 regarding foreign broker-dealers relying on the non-solicitation exemption. It may be up in the air also, like the fate of U.S. stock brokers who also do forex.
Maybe the non-solicitation exemption still applies - I just do not know…
So as a US Resident, I am expected to “don’t ask don’t tell”…
Then to make matters worse…I must worry about my funds being safe…The sort of dealers that would accept my funds now have disclaimer forms!!!
The world of of Forex dealers has always been shady…now this CFTC thing…
No thanks…I quit (If I had more money to lose, I would use a US dealer like Oanda) Those of you entertaining the thought of continuing are just in denial…Get out of Spot Forex, Trading, Leveraging and Speculating! In this worldwide depression the only ones that will make any money are the dealers and the brokers IN ANY RETAIL INVESTING IN ANY MARKET…(the money grabbers got too greedy and we now know their tricks).
I think that investorseurope has had that non-solicitation disclaimer for a while - maybe for years. It is not necessarily a sign of any weakness. No less a major player than MF Global has had such a form for decades to allow Canadians to invest in its U.S. brokerage despite Canadian laws forbidding solicitation of its residents from outside Canada:
The CFTC regulations prohibit foreign brokers from soliciting US customers, but not from servicing them. As long as the non-solicitation disclaimer is signed by a customer, there’s nothing the US CFTC can demand from a foreign broker.
