Going offshore to escape the CFTC

[Clint]

[B]Go Markets…no longer valid to US[/B]

ApacheDan, thanks for the update.

As we feared, the CFTC has been busy making “deals” around the world.

And the Forex Dealers Coalition is now obviously in bed with the CFTC.

[Clint]

I’m very disappointed with the lack of response I’ve gotten from the emails I sent to 18 offshore forex brokers.

Actually, “disappointed” doesn’t really cover it. The results were pathetic. Of 18 brokers contacted, only 3 bothered to reply —

[B]Forex FS[/B] (Australia) replied that they meet our criteria (for offshore brokers)

[B]Tadawul FX[/B] (Cyprus/Switzerland) replied that they meet our criteria

[B]MIG Bank[/B] (Switzerland) replied that their legal status is being reviewed, and they will give us an answer later

Here is the text of the emails that I sent out:

Gentlemen:

I participate in a forex traders’ forum here in the U.S. Recently, there has been a lot of interest on our forum in the topic of offshore forex brokers, and some of our members have begun compiling a list of offshore brokers who meet two criteria:

(1) brokers who are NOT regulated by the U.S. CFTC, and cannot be compelled by the CFTC to comply with any U.S. rules or regulations

(2) brokers who will accept new U.S. clients for spot forex trading

If [ broker name ] meets these criteria, please reply to this email, so that we may include you in our list of recommended offshore brokers. Thank you.

Very truly yours,
(signature and email address)

I will send follow-up emails to the 15 brokers who have not responded, as well as several other brokers who have been suggested in recent posts on this thread.

I’ll send those emails out Sunday evening (New York time) — which will be Monday morning in all offshore locations.

In my follow-up email, I will change the wording to simply ask whether each broker accepts new U.S. clients and wants to be included on our list of recommended offshore brokers.

I recently learned that Tadawul FX is not actually domiciled in Switzerland. They are domiciled in Cyprus, with European offices (and European regulation) in Switzerland.

Accordingly, I’m showing their name as Tadawul FX (Cyprus/Switzerland) from now on.

More later.

[ApacheDan]

…this is a partner with Dukascopy, and found this on their website:

Quote:
Originally Posted by sub00
I got this message from the Australian broker.

From October 18th we will no longer be able to accept new applications from the US due to the recent SEC & CFTC rulings

Any talks in FXopen relating to this USA insanity ruling?

Since we don’t have an office in the US, nor are we an affiliate of a US based broker, we are not bound by CFTC rulings. Rest assured we will be able to accept US clients for the foreseeable future unless a legal impediment appears.

---

FXFrench.com Forex en français!
*FXFrench is the dual language (french/english) partner of FXOpen for the European Market

[java_guy]

My recent correspondence with dukascopy was very clear that they will continue accepting US customers, but I’m definitely nervous.

[forexdiva]

Sorry to report…I enjoyed a Micro Account with them, and this is the message they sent me this morning:

Dear Client,
You may be aware of recent changes in US regulations regarding off-exchange retail foreign currency transactions. In response to the Dodd-Frank bill, the US Commodity Futures Trading Commission (CFTC) adopted a new comprehensive regulatory scheme, which goes into effect on October 18, 2010. The rules apply to retail Forex transactions that are offered or entered into by entities that are solely registered with the CFTC under the Commodity Exchange Act (CEA)…

…Unfortunately due to the restrictions placed by US laws GO Markets will be unable to accept any new trades from US residents after the 18th October 2010 unless you are eligible to meet one of the categories below:
You are an individual or company with total assets in excess of $10,000,000
You are a corporation, partnership, proprietorship, organization, trust, or other entity that has total assets exceeding $10,000,000; that has total assets exceeding $1,000,000 and enter into an agreement, contract, or transaction in connection with the conduct of the entity’s business or to manage the risk associated with an asset or liability owned or incurred or reasonably likely to be owned or incurred by the entity in the conduct of the entity’s business.

Regards,
GO Markets Pty Ltd

If you like Go Markets, you may want to try Vantage FX (also in Australia). Even though Vantage FX is a Corporate Authorised Representative of GO Markets Pty Ltd (at least, they were a while ago), they are accepting US Residents until October 18 and will let us stay after that. I don’t know much about them - I’m still researching them, but here’s the E-mail they sent me last week…

Welcome to Vantage FX and thank you for downloading our demo MetaTrader 4 Trading Platform. I also called today and left a brief phone message.

Due to the recent bill passed for US clients in relation to forex trading, I have been informed that Vantage FX will continue to accept applications for new trading accounts from US customers before the 18th Oct 2010, which leaves us less than 2 weeks to open an account for you.

From the 18th Oct 2010 onwards, we will no longer accept any new applications from US customers. However, we will continue to service any US clients who join before the deadline for as long as they wish.

If you wish to open an account, the process is as follows:

Submit an application online.

You also need to provide ID notarised by an authorised individual attesting that the copies of the original documents are true copies (i.e. exact copies of the originals). I have attached an example of a certified document.

All prospective clients are to provide at least one item from Section A and one item from Section B below.

* Section A:     Certified Copy of Passport or Drivers Licence or Government ID Card
* Section B:     Certified Proof of Residence  - Utility Bill or Phone Bill or Bank Statement no older than 12  months that shows your name and residential address

NOTE: The Notary or person certifying the documents will need to state in writing that they certify the true copy of the original document.

Both documents need to be certified/notarised. Public Notaries can notarise documents and this is the most popular for International clients…

[tom82]

Hi all,

Another Australian fx dealer has come to mind.
For some reason I couldn’t think of it before, just remembered it!
It is Got Money their address is Got Money Forex

[kneal]

I’m new to Forex and frankly I’m a little confused about it all…
Does anyone have any experience with this broker?

exness.com

[DaTrader]

On the [I]Broker Aid Station[/I] forum, a discussion got started about trading through foreign brokers who are outside the jurisdiction of the CFTC. That particular topic really doesn’t belong on that forum. So, I’m opening this thread, as a place where that topic can be continued.

I’ll start this thread with a rant about the CFTC (because I have some ranting to get off my chest). Then, in subsequent posts, we can talk about specific foreign brokers, and whether there are advantages to trading with them.

But, first things first. Here’s my rant:

Getting free of the CFTC, the NFA, and the rest of the Nanny State

We’ve been conned. By Gary Gensler, the head of the CFTC. On another thread, I called Gensler “a sneaky, little weasel”, and I stand by that description.

Gensler set up a straw-man — the 10:1 leverage limit — and we all bravely attacked and destroyed the straw-man, thinking it was the enemy. In 9,000 public comments to the CFTC, we battled against that 10:1 straw-man, and we tore it to shreds; and we said, “If you ram this 10:1 thing down our throats, we’ll take our business offshore.”

All the while, Gary Gensler and his crew were saying, “Gotcha — you’ll take [I]50:1[/I], and you’ll thank us for it. And, by the way,
[I]like hell[/I] you’ll take your trading business offshore!”

The CFTC never intended to impose a 10:1 leverage limit on retail forex in the U.S. From the very beginning, their objective was 50:1; and they achieved their objective masterfully.

The phony 10:1 proposed limit was so extreme that we were relieved when the CFTC “relented”, when they “listened to the voice of the forex community”, when they set the leverage limit at 50:1, instead.

Gensler wrote the sheet-music, and we sang the song. Have we been had, or what?

---

Many reasonable folks, including several on this forum, have pointed out the hazards of using too much leverage, and have endorsed the new CFTC limit. Which misses the point entirely.

It is not the proper business of government to tell us how many calories we may consume, how much we may drink, how much of our paychecks we may spend on lottery tickets, or HOW MUCH FOREX LEVERAGE WE MAY USE.

And it’s not the proper business of government to tell U.S. residents where they may do their banking, or where they may do their trading. Finally, it’s not the proper business of government to tell U.S. forex brokers where they may set up foreign branches, or whom they may accept as customers in those foreign branches.

It IS appropriate for the government to require brokers to furnish full and honest disclosure of the risks involved in forex trading; and it IS appropriate for the government to require that only adults be permitted to participate in this market. Beyond that, the government has no legitimate role, and they should butt out.

---

The CFTC has U.S. forex brokers by the throat: by threatening their ability to do business IN the U.S., the CFTC can interfere with the rights of those brokers to do business OUTSIDE the U.S.

But, the CFTC has no authority over foreign brokers who operate entirely outside the U.S. And under current law, the CFTC has no authority over individual traders [I]who trade through those foreign brokers that are not subject to CFTC regulation.[/I]

The U.S. government claims the authority, through the IRS, to require U.S. residents to report foreign accounts which we hold — bank accounts, brokerage accounts, etc. But, they cannot (yet) prevent us from having those accounts.

The CFTC, and their sock-puppet the NFA, are behaving like the rest of the Nanny State: they are acting like our rulers, rather than our public servants. These people seem to believe they have the right and the power to do anything they want to do.

They’ve never had the right, and they never will have it.

They may have the power — but, not for long.

_______________ END OF RANT ________________

Next post: some things I’ve learned about ACM and dbFX.

[B]I just wanted to say Thanks for the great thread and the effort that you are putting in to contacting all the brokers. it’s nice to have all this info in one place![/B]

[Supernova]

I’m surprised that no one has mentioned IBFX Australia or are they not accepting US residents or limiting them them to 50:1? Been trading since mid September with them on a 200:1 Account. They are licensed with the ASIC (Australian Securities and Investments Commission) so everything looks fine.

www.IBFX.com.au

[sandpipper]

@kneal

I’m new to Forex and frankly I’m a little confused about it all…
Does anyone have any experience with this broker?

exness.com

russian bucketshop with very low spreads.

prob could care less about the cftc or nfa, but i’d be wary. IMHO

[alamoland]

I received an E-Mail from my broker yesterday telling me they would be closing my account as of the 18th due to CTFC rules. My broker is GO Markets in Australia. If I could attach the E-Mail I would, but I don’t see any way. At any rate, to paraphrase what they have said: Although we are controlled by ASIC here in Australia there is a ‘memorandum of understanding’ between ASIC and the CFTC that prohibits us from servicing US citizens any longer. (I’m so P*sed I can hardly type!). They go on to say there are certain exceptions. If I’m residing in the US, but not a citizen, then I’m OK. If I have $10,000,000 or more in my account, then I’m OK! There are others, but I can’t remember them offhand. I didn’t qualify for any of them.
I left IamFX in March to avoid this BS. A broker I was happy with, which by the way, I think went out of business the other day, or perhaps is moving to Panama, I’m not sure. I am sure it’s related to this CFTC crap. You know, as do I, Forex is hard enough without the Fing government ‘helping’.
If this seems incoherent, please pardon me. The election is soon, and we have to get these imbeciles fired!
Really frosted,

[tom82]

A website that has come to my attention is Forex Ratings - Forex Broker Rating. Top Rated Forex Brokers Forex Ratings.
May be of interest when it comes to researching for brokers.

[alamoland]

Thanks tom,
I’ll take a look…Sorry about the rant.

[tom82]

alamoland,
No worries.
I understand it is very frustrating times for all involved that these new rules affect.

[Clint]

Late Sunday afternoon, I sent emails to five Australian forex brokers and two New Zealand brokers, inquiring whether they are currently opening new accounts for U.S. residents. (Sunday afternoon EDT was Monday morning in Australia and New Zealand.)

Australian brokers emailed Sunday, October 10

Axi Trader — Forex Trading | Forex Broker | Forex Brokers | Forex Trading Platform

Forex CT — ForexCT Forex Trading

Halifax Investment Services Ltd — Foreign Exchange FX - Stock brokers for FX Foreign Exchange - Halifax Investment Services

IG Markets — Forex Trading | Forex Online | Trading Currency

Vantage FX — Online Forex Trading And MetaTrader 4 Brokers - Vantage FX

New Zealand brokers emailed Sunday, October 10

Latitude FX — Trade foreign exchange online - Live currency trading

WSD — WSD Global Markets Ltd : The online trading provider matching highest standards in integrity and safety

Five of these brokers are being contacted for the second time. I first emailed them on October 4, and they have not replied yet.

Two brokers, [B]Forex CT[/B] and [B]Vantage FX[/B], are new additions to our list of prospects.

Later this morning, I will send follow-up emails to U.K., German and Swiss brokers.

[Clint]

Axi Trader (Australia) is no longer a prospect. I just received this reply:

[tom82]

Hi Clint,

You are doing a great job.
How did you get on with my suggestion of Got Money fx, they are based in Brisbane Australia I think?
IIRC I added their url to one of my previous messages.

[millerja01a]

I was with an ASIC broker and they will be closing my account of Oct 18th.

Chatted with TadawulFX agent and they will take US traders at 500:1. As soon as my funds arrive from my now former Aussie broker, I’m going to Tadawul.

Will post experiences when I can.

[tom82]

Another Swiss broker has come to my attention, ie Forex.ch part of GFX group.
Their address is FOREX.CH

[dragofx]

I just contact forex.ch their live chat operator was unable to answer the question. They are supposed to be emailing me shortly.

Is the ASIC going to be completely impacted or was the comment made by gomarkets exclusive to them?

As much as I would like to remain in one of the major financial sectors, I am going to begin looking at brokers in less traditional markets.