Going offshore to escape the CFTC

[Tallinex]

I was only thinking the other day how quiet it’s been in this thread, so nice to have something I can respond to

It’s been about 5 months since you’ve posted the above about the possibility of Tallinex having a Daily candle that opens each day at 5:00pm EST. What is the situation now with it?

Yes - it has! Unfortunately, the approach we intended to use proved less resilient than anticipated, so we’ve been exploring alternative solutions. I’m hoping to provide a more complete answer over the coming days.

I will be honest and say I will have to stop using Tallinex and go with another broker that DOES use 5:00pm EST (my trading system depends on it). It is widely known that the time of 5:00pm EST - the close of the New York session - is the unofficial start of the Daily candle and I just don’t understand why Tallinex hasn’t switched to that time.

The main reason for NOT switching is pretty-much the same as your reason for us TO switch… we’ve got thousands of clients who base their strategies on our current server time and would be unhappy if we changed things… that’s why we were looking for a way to accommodate everyone.

[Tallinex]

Hi. I’m opening a Live FinPro MetaTrader ECN account, with their minimum of $100.

They claim to have tight spreads, and I have software to measure that so I’ll report the
spreads over a 24 hour period on an hourly basis across the 28 major currency pairs.
I’ll also report that same info for Tradersway.

As a U.S. resident and citizen, so far no problems with the FinPro application, I’ll follow up…

My main reason for this is that I use Tradersway right now, and they have very good spreads,
better at times than Dukascopy. However, and I don’t want to pick any fights here, Tallinex
has spreads which are 2x wider than those of Tradersway so I’m looking for a narrow spread brokerage
with high performance; hence I want to evaluate FinPro live. And I want a “backup” brokerage…

I’m also hoping that leverages are negotiable.

hyperscalper

No offence taken, but just to put things into perspective, our Pro spreads are pretty reasonable (if not excellent) compared with many brokers (even those who don’t accept US residents), and we charge a very reasonable commission on Pro accounts.

True, our Micro spreads aren’t razor-thin, but that needs to be put in perspective…

1. Tallinex is ECN-STP, not 50/50 like many brokers
2. there aren’t many (actually, almost no) Liquidity Providers that accept micro lots
3. those that will don’t offer the keenest spreads

Rather than follow in the footsteps of many brokers and simply trade against micro account clients (which is how narrow micro spreads are usually achieved), Tallinex passes all trades into the market because it hands off the risk (good for us), and it’s ultimately fairer to clients (good for them).

Furthermore, part of that spread (or commission, in the case of Pro accounts) goes towards funding:

a) the ‘sub-1ms latency’ VPSs that Tallinex offers free to all live-account clients
b) the most genuine and transparent deposit bonus offered by any broker, anywhere

Please also remember that we offer leverage up to 1:1000 - quite unusual for a true ECN-STP broker.

So, for someone who truly needs ultra-thin Micro spreads (and those who just can’t see the big picture and only fixate on spreads), Tallinex probably isn’t the right initial choice.

However, for traders seeking the safety (if anyone can even use that word these days!) of a solid brokerage that’s been a magnet for large-account clients and money managers from around the world since day 1 (and for those who eventually learn the hard way that narrow spreads come at a cost), Tallinex could be exactly what your looking for.

Just sayin’

[pipfreak]

The main reason for NOT switching is pretty-much the same as your reason for us TO switch… we’ve got thousands of clients who base their strategies on our current server time and would be unhappy if we changed things… that’s why we were looking for a way to accommodate everyone.

Okay, yes, that does make sense. I didn’t think about the dilemma your company has in regards to your current clients with your current sever time versus clients that want the 5:00pm EST time. I do see the problem you are having with the 2 different server times.

It is just too bad Tallinex didn’t think ahead and from the beginning have your Daily candle start at the 5:00pm EST time (sorry, I don’t know what it is in gmt time). I just think that, given a choice, the majority of people in forex would prefer the unofficial Daily opening candle of 5:00pm EST.

[compounder]

I have had an account with Profiforex for about 3 or 4 years but have used it very little in the past year. I only have about 10 bucks in the account, which still appears on their trading station. According to a chat with them today it looks like the accounts of existing US traders will remain intact and continue to be tradable. Below is my copy of the chat transcript:

Operator Juliet has joined the chat.
Juliet: Dear compounder, welcome to Profiforex! My name is Juliet and I am happy to assist you. How may I help you?
Ticket S60222-T12721 is created. The chat transcript will be attached to this ticket after the transcript is saved by system.
compounder: What will happen to the accounts of US traders you already have?
compounder: Are you no longer accepting US traders?
compounder: The bottom of your website says that American traders will not be serviced.
Juliet: One moment please
Juliet: Thank you for your patience compounder
Juliet: We do appreciate it
Juliet: Our US clients get to keep their account with us
compounder: So you no longer accept new US traders but existing US traders can continue to trade with you?
Juliet: Yes compounder
compounder: Okay, that is good news for your present US traders. Thanks. Goodbye.
compounder: Wait.
Juliet: You are most welcomed compounder, okay
compounder: Why are you no longer accepting US traders?
compounder: New restrictions from the United States authorities?
Juliet: Yes, US regulations
compounder: I understand. Please send a copy of this chat to me by email. Thanks. Goodbye.
Juliet: You are welcomed once again compounder
Juliet: Sure
Juliet: Thank you for coming on Live Chat.
Should you have further questions or comments please do not hesitate to contact us again via live chat or e-mail: <[email protected]>.
Juliet: Enjoy the rest of your day ,bye
Operator Juliet has left the chat.

Hopefully Trump or another Republican will get elected and then finally put an end to this Dodd-Frankenstein nightmare that continues to actually stifle the American economy.

[Clint]

Re: [B]Profiforex (Seychelles)[/B]

I have had an account with Profiforex for about 3 or 4 years … it looks like the accounts of existing US traders will remain intact and continue to be tradable.

Thanks for that update, compounder.

Re: [B]LMFX (Macedonia)[/B]

I received an email from LMFX (the sender was not identified by name) asking how LMFX can gain the Trusted Broker designation in our List. Here’s a copy-and-paste of the email:

Hello Clint,

I’m writing you in regards of the trusted broker status at the topic that you manage at babypips.
Please let me know what is the procedure of becoming one of the trusted brokers. We do our business in a transparent way and will do our best to fit in the trusted brokers category.
Looking forward for your reply!

I will send a reply to LMFX today, acknowledging receipt of their email. I will also refer them to THIS POST in which I outlined the history of Trusted Broker designations in this thread.

And finally, I will commit to getting a conversation started in this thread about awarding the Trusted Broker designation to LMFX, and I will encourage qualified representatives from LMFX to participate in that conversation.

I can’t have a conversation with myself, so I need you guys to weigh in on this question:

Should we designate [B]LMFX (Macedonia)[/B] as a Trusted Broker in the Offshore Broker List?

Re: [B]SmartTradeFX (SVG)[/B]

I’m trying to gather more information on the issues that prompted the WARNING which currently appears on the SmartTradeFX listing on page 1. I started by attempting to open a live account with SmartTradeFX, and got stymied at the very first step — on their application, USA is not listed in the drop-down menu for country of residence.

I sent an email to SmartTradeFX, asking for information. Their Live Chat was offline at the time (it was 3am in SVG when I sent it), so I’m waiting for a reply. When I know more, I’ll report it here.

.

[LMFX]

Hello Clint,

I would like to apologize for not entering my name in the email sent to you. My name is Maria Bachvarova and I am an official representative of LMFX.

Thanks for the given opportunity of becoming designed as a Trusted Broker in case of a positive decision of the thread participants. We will be happy to answer any questions you may have and we will remain at your disposal.

Kind Regards,
Maria Bachvarova
Official LMFX Representative

[Clint]

Hello Clint,

I would like to apologize for not entering my name in the email sent to you. My name is Maria Bachvarova and I am an official representative of LMFX.

Thanks, Maria.

While you were submitting your post (which I am just now reading for the first time), I was composing a reply to your email, which I addressed simply to “LMFX”.

From now on, I shall address you by name.

Thanks for your participation in our thread.

.

[Tallinex]

Okay, yes, that does make sense. I didn’t think about the dilemma your company has in regards to your current clients with your current sever time versus clients that want the 5:00pm EST time. I do see the problem you are having with the 2 different server times.

It is just too bad Tallinex didn’t think ahead and from the beginning have your Daily candle start at the 5:00pm EST time (sorry, I don’t know what it is in gmt time). I just think that, given a choice, the majority of people in forex would prefer the unofficial Daily opening candle of 5:00pm EST.

In fact, we DID think ahead - our first clients (and the driving force behind the formation of Tallinex) were a group of fund managers who controlled significant assets… and all traded based on GMT+0, so going ‘NewYork’ from the outset would not have put us in a great position there.

Regardless, we hope to have some good news soon for everyone with east-coast tendencies

[Clint]

I received another email from [B]LMFX[/B] (Macedonia) — this one from the CEO:

LMFXconnect

Dear Clint,

Thanks for the reply and the explanation! I have decided to reply to that email personally, because I consider it important for our business development.

My name is Venelin Videnov and I’m the CEO of LMFX.

I see that Maria already posted a reply in the topic at Babypips. I’ll be monitoring it closely as well.

If we get positive votes from the community it will be an honor for us to become one of the trusted brokers. Let me know if you need any details from or have any questions.

You can contact me directly at <[email protected]>

Have a great day ahead!

---

Kind Regards,
Venelin V
LMFX Social Department

This broker is certainly eager to join the top echelon on our List.

I think we owe them the courtesy of a thorough discussion and a timely decision on their request to be considered for the Trusted Broker designation.

I’m especially interested in the opinion of anyone on this thread who has traded (live) with LMFX.

I prefer not to express my own opinion, until the rest of you have weighed in.

I’ll wait to hear from you guys.

.

[sknight1]

Leverage up to 1:1000…?

Bummer…! I have a Tallinex micro account and get only 1:400. :50: Not that I “need” 1:1000.

No offence taken, but just to put things into perspective, our Pro spreads are pretty reasonable (if not excellent) compared with many brokers (even those who don’t accept US residents), and we charge a very reasonable commission on Pro accounts.

True, our Micro spreads aren’t razor-thin, but that needs to be put in perspective…

1. Tallinex is ECN-STP, not 50/50 like many brokers
2. there aren’t many (actually, almost no) Liquidity Providers that accept micro lots
3. those that will don’t offer the keenest spreads

Rather than follow in the footsteps of many brokers and simply trade against micro account clients (which is how narrow micro spreads are usually achieved), Tallinex passes all trades into the market because it hands off the risk (good for us), and it’s ultimately fairer to clients (good for them).

Furthermore, part of that spread (or commission, in the case of Pro accounts) goes towards funding:

a) the ‘sub-1ms latency’ VPSs that Tallinex offers free to all live-account clients
b) the most genuine and transparent deposit bonus offered by any broker, anywhere

Please also remember that we offer leverage up to 1:1000 - quite unusual for a true ECN-STP broker.

So, for someone who truly needs ultra-thin Micro spreads (and those who just can’t see the big picture and only fixate on spreads), Tallinex probably isn’t the right initial choice.

However, for traders seeking the safety (if anyone can even use that word these days!) of a solid brokerage that’s been a magnet for large-account clients and money managers from around the world since day 1 (and for those who eventually learn the hard way that narrow spreads come at a cost), Tallinex could be exactly what your looking for.

Just sayin’

[john81az]

Leverage up to 1:1000…?

Bummer…! I have a Tallinex micro account and get only 1:400. :50: Not that I “need” 1:1000.

Actually if you contact Tallinex support they can increase your leverage to 1:1000 on micro account.

[Tallinex]

Actually if you contact Tallinex support they can increase your leverage to 1:1000 on micro account.

Actually, they can’t - leverage above 1:400 on micro accounts (1:200 on Pro) is solely based on on-going assessment by the risk profiling system.

[john81az]

Actually, they can’t - leverage above 1:400 on micro accounts (1:200 on Pro) is solely based on on-going assessment by the risk profiling system.

Oh ok I saw on the Tallinex website about the max leverage of 1:1000 and contacted live support and they said I would need to contact email support to raise my leverage to 1:1000 but I never tried it yet so I am a bit confused at this point …

[Tallinex]

Oh ok I saw on the Tallinex website about the max leverage of 1:1000 and contacted live support and they said I would need to contact email support to raise my leverage to 1:1000 but I never tried it yet so I am a bit confused at this point …

You may have chatted with a new team member who was unaware of the situation (it was previously possible to get leverage manually increased to 1:600), but the current position is as I stated previously because the process is now totally automated and no manual adjustments are possible. Assessment is continuous and based on the most recent 30 days… I know that a number of clients have 1:1000 so it’s quite possible to achieve if your trading is ‘sensible’.

[pipfreak]

In fact, we DID think ahead - our first clients (and the driving force behind the formation of Tallinex) were a group of fund managers who controlled significant assets… and all traded based on GMT+0, so going ‘NewYork’ from the outset would not have put us in a great position there.

Regardless, we hope to have some good news soon for everyone with east-coast tendencies

Thanks for the detailed explanation in your last couple of posts in regards to why your sever time is the way it is. I have to admit that I previously thought your company didn’t put much thought into choosing the server time that you currently have. But, now I see there was a reason why you have the server time as you have it now. However, the 5:00pm EST New York close is a key part of my trading system and I have no other choice but to use another broker with my trading system (maybe I will now use TradersWay). I still will keep my Tallinex account and at some point in the future I may use it again, IF I happen to change to a different trading system in which the server time doesn’t matter.

If Tallinex ever decides to have their MT4 with a Daily candle open at 5pm EST, then I will certainly use it with my current trading system.

[Tallinex]

Thanks for the detailed explanation in your last couple of posts in regards to why your sever time is the way it is. I have to admit that I previously thought your company didn’t put much thought into choosing the server time that you currently have. But, now I see there was a reason why you have the server time as you have it now. However, the 5:00pm EST New York close is a key part of my trading system and I have no other choice but to use another broker with my trading system (maybe I will now use TradersWay). I still will keep my Tallinex account and at some point in the future I may use it again, IF I happen to change to a different trading system in which the server time doesn’t matter.

If Tallinex ever decides to have their MT4 with a Daily candle open at 5pm EST, then I will certainly use it with my current trading system.

As I mentioned, we ARE looking at options that will allow clients to run on NY time if they wish, and we hope to have at least one option over the next couple of weeks that resolves the situation.

[trey1975us]

Hello all,

I am hoping someone out there can help me. I spent the last 9 months working my butt off to create an EA with my developer in Romania, and now it looks like it works very well and will be quite profitable. I am a US resident, this EA utilizes hedging as a part of its strategy… furthermore, I depend on a large amount of leverage from the broker.

I created an LLC this week all ready to start my trading business, and I met with a US tax attorney to ensure I was setting things up properly and in the most tax efficient manner. He informed me that the offshore broker that I am using is illegal to use as a US resident, and recommended that I close the account down immediately. I then looked into US brokerages and quickly learned that due to restrictions like no hedging and small leverage, I would not be able to use my EA I worked so hard to build.

After reading this thread and others on the topic of US residents having trading via offshore brokerage accounts, I am not convinced that it is actually illegal for me to trade in non US based brokerage. From what I have read, the restrictions seem to be targeting the institutions, many of whom have either shut down their US arm of operations or simply stopped accepting US clients altogether.

I happen to trader with an offshore brokerage which accepts US clients. Am I within my rights to do so? Will I have trouble come tax time? If it’s a problem for me to trade as a US citizen in this offshore brokerage, what options do I have. I have certainly worked too hard to create this thing to stop here. I want have no interest in tax evasion or anything like that… I just want to trade! Any help would be greatly appreciated.

Oh, and if any of you know of tax attorneys who could be helpful in this manner I would love to get their information. Thanks!!

[SiphonFilter]

Hello all,

I am hoping someone out there can help me. I spent the last 9 months working my butt off to create an EA with my developer in Romania, and now it looks like it works very well and will be quite profitable. I am a US resident, this EA utilizes hedging as a part of its strategy… furthermore, I depend on a large amount of leverage from the broker.

I created an LLC this week all ready to start my trading business, and I met with a US tax attorney to ensure I was setting things up properly and in the most tax efficient manner. He informed me that the offshore broker that I am using is illegal to use as a US resident, and recommended that I close the account down immediately. I then looked into US brokerages and quickly learned that due to restrictions like no hedging and small leverage, I would not be able to use my EA I worked so hard to build.

After reading this thread and others on the topic of US residents having trading via offshore brokerage accounts, I am not convinced that it is actually illegal for me to trade in non US based brokerage. From what I have read, the restrictions seem to be targeting the institutions, many of whom have either shut down their US arm of operations or simply stopped accepting US clients altogether.

I happen to trader with an offshore brokerage which accepts US clients. Am I within my rights to do so? Will I have trouble come tax time? If it’s a problem for me to trade as a US citizen in this offshore brokerage, what options do I have. I have certainly worked too hard to create this thing to stop here. I want have no interest in tax evasion or anything like that… I just want to trade! Any help would be greatly appreciated.

Oh, and if any of you know of tax attorneys who could be helpful in this manner I would love to get their information. Thanks!!

1 post and you are posting this. You must have some bot, trading is one aspect, the broker is the other. How trustworthy are they really? What about the so called liquidity providers? From what I understand Forex is not a regulated market. If it is, it’s in the country of the broker, are you going to go to that country and fight it out with them if there is a problem? Go offshore presents a different risk.

[trey1975us]

1 post and you are posting this. You must have some bot, trading is one aspect, the broker is the other. How trustworthy are they really? What about the so called liquidity providers? From what I understand Forex is not a regulated market. If it is, it’s in the country of the broker, are you going to go to that country and fight it out with them if there is a problem? Go offshore presents a different risk.

I am new to this board, but not new to trading. Furthermore, I believe it should be my choice as a US citizen to determine if i want to take those so called risks or not. BTW,many large corporations are headquartered offshore. Anyway, i am looking for someone to help answer my question regarding the legality of me doing so as a us based retail forex trader.

[Clint]

I created an LLC this week all ready to start my trading business, and I met with a US tax attorney to ensure I was setting things up properly and in the most tax efficient manner. He informed me that the offshore broker that I am using is illegal to use as a US resident, and recommended that I close the account down immediately. I then looked into US brokerages and quickly learned that due to restrictions like no hedging and small leverage, I would not be able to use my EA I worked so hard to build.

After reading this thread and others on the topic of US residents having trading via offshore brokerage accounts, I am not convinced that it is actually illegal for me to trade in non US based brokerage. From what I have read, the restrictions seem to be targeting the institutions, many of whom have either shut down their US arm of operations or simply stopped accepting US clients altogether.

You are correct: It is [B]not[/B] illegal for you — as a U.S. resident — to trade offshore.

You got false information and bad advice from that tax attorney. More on that at the bottom of this post.

Here are 3 posts addressing your specific issues. They are somewhat repetitive on certain points, but I think you will benefit from reading all of them.

http://forums.babypips.com/forex-brokers/36221-going-offshore-escape-cftc-post711796.html#post711796

http://forums.babypips.com/forex-brokers/36221-going-offshore-escape-cftc-post643933.html#post643933

http://forums.babypips.com/forex-brokers/36221-going-offshore-escape-cftc-post692867.html#post692867

Regarding bad legal advice from tax attorneys:

You may have been talking to the same tax professional which I previously recommended in this thread. As the [I]Edit[/I] in the second link above explains, I no longer consider that person/firm to be a reliable source of information on [B]taxes applicable to offshore trading by U.S. residents.[/B] On taxes applicable to trading with U.S. brokers, he is very knowledgeable.

.