Are Your Funds Safe? NFA to Shut down small forex fcms

[forex savior]

Originally Posted by VulcanClassic

Any idea when the deadline is?

Gotta pass the Congress first

[forex savior]

I have been hearing a lot about FXDD and people have been asking me about their regulatory status. So what's the scoop?

FX Direct Dealer is a New York City based broker located in Manhattan . FXDD used to be affiliated with Tradition Securities. However, today Tradition only owns a small percentage of the firm. Thus FXDD is in no position to claim Tradition as a parent company for regulatory purposes.

So aren�t they then required to register according to the law? Not according to FXDD. Here is a response I got from a customer service rep over at FXDD when I asked them this question on their chat:

Forex Inquiries: FXDD began as a subsidiary of Tradition North America within the Tradition Group of companies. (http://www.traditiongroup.com/uk/home3.asp). FXDD's management, operation, compliance, customer relations and its financial policies and procedures were structured to meet the Tradition Group's oversight and those policies and procedures remain firmly in place. Our managers have deep experience in the foreign exchange markets and we conduct our business as highly qualified professionals. As yet, the OTC spot forex market in the United States is not subject to regulation by the SEC or the CFTC. FXDD is not a member of any private self regulatory organization such as the FINRA or the NFA and is not registered with either the CFTC or the SEC. Congress is considering legislation that will require all forex dealers to register, probably with the CFTC and join NFA as it is the only recognized private futures regulatory authority. So,as the regulatory environment for spot foreign exchange changes, FXDD will keep its options open and, if congress passes new legislation, FXDD will register with the designated oversight agencies. Having said that, FXDD manages its business in conformity with well established dealing protocols and the customs and practices of the foreign exchange dealing community. FXDD has thousands of clients who have chosen us as their dealing firm because of the manner in which we conduct our business and because of our historic association with the Tradition Group. We maintain extensive dealing lines with the top global banks and have never had any issues relating to the protection of customer assets or the manner in which we handle our client accounts.

Uh, someone should let FXDD Know that OTC spot forex IS regulated in the United States and they ARE subject to regulation by the CFTC.

I have put the question to FXDD by email but have yet to get a response. Customers need to be aware that this firm is swimming in some very murky regulatory waters. The CFTC could crash through FXDD�s door at any moment and demand the firm shut down their business because they are not regulated. Every retail forex dealer in the United States has accepted the CFTC as their regulator but FXDD is claiming they have no jurisdiction? This firm in my opinion is a very risky place to put your money. Buyer Beware.

[forex savior]

The new CFTC Numbers Are Out. Here they are:
Financial Data for FCMs

Above $20 Million
Oanda $159,786,916
RJ O'Brien $101,983,527
FXCM $81,150,191
GFT Forex $68,407,128
Gain Capital $66,579,458
I Trade FX $35,037,710
Interbank FX $25,733,263

Below $20 Million
PFG $17,986,053
FX Solutions $16,140,253
CMS $13,726,169
ODL $12,639,482
GFS Forex $10.4
IFX $12,343,198
CMC $8,773,706
Alpari $9,001,039
Ikon $8,271,674
Easy Forex $7,799,807
Hotspot $7,675,145
MB Trading $8,015,568
Friedberg Mercantile $7,985,613
Forex Club $7,639,479
Money Garden $6,367,331
Bacera $5,554,498
Advanced Markets $5,239,792

[forex savior]

And so it begins. Switzerland has finally decided to flush their financial system and purge the worst forex dealers from their bloated and cramped bowels. Henceforth, any forex dealer who wishes to do business in Switzerland MUST get a banking license. No longer can firms deceive the public by claiming they are regulated because they have a worthless registration with ARIF or some other anti-money laundering committee. Now they must get an actual license, that comes with an actual license number, which allows the trading public to do an actual background check on them. I congratulate the Swiss on taking this huge step forward and with that, leaving the dark ages and entering the modern era.

For more information on this new law read below. Next week I'll discuss how this law is effecting forex brokers all over Europe. Already two major players are closing their doors (WestCap FX and Northfinance.) Other Swiss brokers are sure to close up shop as well. If you have your money at a Swiss broker you should immediately check with them to see if they plan on complying with the new law. If they do not plan on complying TAKE YOUR MONEY OUT NOW. And if they plan on fleeing to some God forsaken island where there is no regulation TAKE YOUR MONEY OUT NOW.

Switzerland: Foreign exchange traders
Thouvenin Rechtsanw�lte, Zurich

International Financial Law Review - Foreign exchange traders March 2008 1 March 2008

The Swiss Federal Banking Commission (SFBC) estimates that about 150 foreign exchange (forex) traders are registered as financial intermediaries in Switzerland, who have not been subject to regulation under Swiss banking and finance legislation. In particular forex traders managing accounts for more than 20 individual clients did not fall under SFBC supervision in the past, as long as those accounts were not interest-bearing and were only used to execute customer orders.

In recent years, the SFBC has seen a growing number of complaints, especially from smaller investors, regarding transparency, liquidity and risk disclosure, let alone the substantial losses sometimes suffered by these investors.

The SFBC took action in November 2007 by proposing an amendment to Article 3a paragraph 3 section c of the Swiss Banking Ordinance. Forex dealers will be required to apply for a banking status under the Swiss Banking Act of 1934, as amended. At the same time, security dealers and precious metal traders continue to be exempted with their client accounts under said Article 3a paragraph 3 section c. A banking status under the Swiss Banking Act requires a minimum paid-in share capital of Sfr10 million ($9 million) and further equity requirements to appropriately cover credit, operational and other risks. Bank management members in Switzerland must meet certain professional standards. A Swiss bank must also meet organisational standards, providing for separate corporate bodies for supervision, management and control.

From April 1 2008, existing forex traders in Switzerland are required to register with the SFBC. The registration process ends on June 30 2008. One year later, that is, on March 31 2009, forex traders must meet the above requirements and must have applied for a banking licence.

It is expected that many forex dealers will not be able to obtain a Swiss banking licence because they may not be able to meet the capital and/or organisational requirements. Instead of applying for a banking licence they may explore other legal avenues, such as teaming up with a Swiss bank or Swiss security dealer for example and acting as an independent asset manager, converting their business model by no longer accepting deposits from the public, or by offering their forex products by means of securities or through mutual funds.

[newbie10]

NorthFinance Support Team: Do you have an account with us?

you: no acct yet

NorthFinance Support Team: Currently we are not accepting new account openings.

NorthFinance Support Team: To ensure the bests interests of our existing clients and yours as a potential client, we decided to operate as a Master Introducer referring all new clients to FxPro for execution of their trades in Forex and CFDs. This is a European regulated broker with better terms and conditions. More information on FxPro can be found below or by visiting

NorthFinance Support Team:

you: so are you going out of business or something?

you: No North Finance trading platform anymore?

NorthFinance Support Team: Due to the unexpected growth, our trading platform for both REAL and DEMO accounts reached its maximum capacity and the addition of new clients might jeopardize the performance of the platform itself.

NorthFinance Support Team: Therefore, we have decided not to accept new clients on our NF platform to avoid any possible inconvenience or system delays that might be caused and affect existing users.

NorthFinance Support Team: Currently, we are evaluating various options on how to upgrade our platform in order to be able to accept more clients in the near future.

NorthFinance Support Team: We are still operating for current clients.

[forex savior]

Swiss Dealer Dead Pool

There is great deal of uncertainty in the Swiss Forex Dealer community right now. There is no way of knowing which firms are here to stay and which firms are collecting coins in preparation for their crossing of the river Styx. I have emailed all the major Swiss firms to try and find out if each firm plans on getting a banking license. The responses (or lack thereof) have been quite illuminating.

As such I'm starting a Swiss Dealer Dead Pool to keep the trading public updated and informed about what is going on in Switzerland.

Firms that announced they are applying for a banking license
These firms have confirmed they plan on getting a banking license.
1) ACM
2) Fibo Group
3) Crown Forex

Firms that are fleeing Swiss Regulation
These firms have stated they are registered offshore and don't need to register.

1) Masterforex. Their business office is listed in Switzerland but they are registered in the Seychelles and have stated they do not need to get a banking license.
2) forex-swiss. FXCH, despite the fact they are NAMED "Forex Swiss" claim registration in Dominica. This is an odd company that has claimed multiple office addresses over the years including, Switzerland, Austria, South Africa, Iran, and the United States. Today they are claiming they have offices in Dominica and the United Kingdom. Tomorrow who knows, they could claim a mailing address in Tibet. Beware this firm.
3) Prime4X. Their head office is in Switzerland but they have stated they are applying for a license in Cyprus.

Firms that are no longer accepting customers
These firms are no longer accepting new customers.

1) WestCapFX

Firms that refuse to comment
These firms refuse to comment on the new licensing requirement thus leaving their customers completely in the dark about their future. I strongly recommend anyone who has an account with any of these firms take their money out immediately due to their lack of transparency.

1) GFX Group (Forex.CH)
2) DukasCopy
3) MIGfx
4) Swiss Direkt
5) Tadawulfx
6) Aleccohfx
7) Advised Trading

As always conduct your due diligence and make sure the firm you trade with is regulated and legit.

[Sweet Pip]

Anything on North Finance? (I take it they're not Swiss but asking anyways)

According to their website, they are no longer taking on any new customers either, but they claim that is because they've outgrown their capacity to handle more customers. Instead they are referring new accounts to FXPro.com as a "Master Introducer". Any info on them?

Thanks for your diligent efforts to keep us all in the loop

[forex savior]

Originally Posted by Sweet Pip

Anything on North Finance? (I take it they're not Swiss but asking anyways)

According to their website, they are no longer taking on any new customers either, but they claim that is because they've outgrown their capacity to handle more customers. Instead they are referring new accounts to FXPro.com as a "Master Introducer". Any info on them?

Thanks for your diligent efforts to keep us all in the loop

Northfinance has clearly antagonized government regulators in Cyprus. In fact, Cyprus regulators have put out a warning on doing business with NorthFinance:

Επιτροπή Κεφαλαιαγοράς Κύπρου

It appears they may have worn out their welcome. It is also a bit suspicious that they stopped doing business at the exact same time that WestCapFX stopped doing business. What is the other connection to these two firms? Both firms are now referring customers to FXPro.com...

[Sweet Pip]

Originally Posted by forex savior

Northfinance has clearly antagonized government regulators in Cyprus. In fact, Cyprus regulators have put out a warning on doing business with NorthFinance:

Επιτροπή Κεφαλαιαγοράς Κύπρου

It appears they may have worn out their welcome. It is also a bit suspicious that they stopped doing business at the exact same time that WestCapFX stopped doing business. What is the other connection to these two firms? Both firms are now referring customers to FXPro.com...

Interesting...good to know; Thanks again for the info!

I think I'll switch over and try Interbank FX ... I'm definately not going with North Finance now or FXPro, so why demo with them any longer.

[forex savior]

Over the last few years an increasing number of forex firms have been popping up in Cyprus. It appears the Cypriotic authorities are taking notice and have begun to clamp down on rogue forex dealers. Recently The Cyprus Securities and Exchange Commission put out two separate warnings on forex dealers:

Cyprus Securities and Exchange Commission

Note the second warning is in reference to Northfinance. This warning was put out last summer. Since then Northfinance has stopped accepting new customers as per this widely circulated chat in which they claim they are experiencing "server overload."
North Finance .... red light?

NorthFinance Support Team: Hello, My name is Anthony.
NorthFinance Support Team: May I please have your name and North Finance Account Number?
you: hello, my name is (edited)
NorthFinance Support Team: How may I help you?
you: i just want to ask regarding news that i heard, that NF is changing to EURO ORIENT SECURITIES AND FINANCIAL SERVICES LTD.
you: is it true ? and what are the impact to all customer ?
NorthFinance Support Team: Due to the unexpected growth, our trading platform for both REAL and DEMO accounts reached its maximum capacity and the addition of new clients might jeopardize the performance of the platform itself. Therefore, we have decided not to accept new clients on our NF platform to avoid any possible inconvenience or system delays that might be caused and affect existing users. Currently, we are evaluating various options on how to upgrade our platform in order to be able to accept more clients in the near future.
NorthFinance Support Team: To ensure the bests interests of our existing clients and yours as a potential client, we decided to operate as a Master Introducer referring all new clients to FxPro for execution of their trades in Forex and CFDs. This is a European regulated broker with better terms and conditions. More information on FxPro can be found below or by visiting
NorthFinance Support Team: FxPro
NorthFinance Support Team: Existing clients can still enjoy all the benefits of using North Finance
you: so, it is the same company. but not automatically become fxpro member. right ? need to register again, right ?
NorthFinance Support Team: Due to the overwhelming success of North Finance, we have experience incredible growth, and to avoid reaching maximum capacity North Finance will not be accepting any new registrations directly on the North Finance platform
NorthFinance Support Team: It is not the same company, however North Finance does recommend FXPro for new clients
NorthFinance Support Team: North Finance will operate as a Master Introducer referring all new clients to FxPro
NorthFinance Support Team: You can create an FXPro account directly on their website if you wish Sir
NorthFinance Support Team: and you can also continue trading with your current North Finance account.
NorthFinance Support Team: FxPro does differ to North Finance, and FxPro is a European regulated broker with better terms and conditions.
NorthFinance Support Team: You do not automatically become a member of FxPro. You would need to register on the FxPro website
NorthFinance Support Team: You would also be able to withdraw your funds from your North Finance account to your FxPro account if you so wished.
NorthFinance Support Team: You can also to continue trading with your North Finance account as it is if you wish sir
you: oh ... i see. ok, thank you very much for the explanation. good bye.
NorthFinance Support Team: You're welcome
NorthFinance Support Team: Thank you for the chat, Bye for now!

Who is FX Pro? They are the same company that West Cap FX is now referring customers to since the new banking regs got passed in Switzerland. So it appears FX Pro is cleaning up nicely as a result of the increased level of scrutiny for forex dealers.

FX Pro is regulated in Cyprus by the Cyprus Securities & Exchange Commission. In fact, you can check the regulatory status of any Cyprus based broker by going to the Cyprus SEC's website here:
Cyprus Securities and Exchange Commission

You'll see FX Pro (under Euro Orient) and other firms such as Easy Forex and Windsor Brokers. This is verification that the firm is registered. I can't speak for the quality of regulation that Cyrpus provides but clearly any firm that is not registered here with their own license number should be avoided if they are claiming a residence in Cyprus. I see that Northfinance never had such a license number. Is it a coincidence then that they are no longer accepting new customers? I guess we'll never know for sure...