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

[forex savior]

So say news reports coming out of Australia. A few weeks ago, at the height of the financial panic, leading CFD provider Saxo Bank took a meat cleaver to their work force in a frenzied effort to slash costs. CMC now appears to be following suit. They had already laid off staff and closed their U.S. office and another office in Perth, Australia. But now more redundancies lie over the horizon and the company just held an emergency meeting for all their staff at a hotel in Sydney. Details below:
CompareShares.com.au - company news

Crisis meetings at CMC Markets
Toni Case - November 6, 2008

CFD specialist CMC Markets held an all-staff meeting at the Intercontinental Hotel in Sydney today at 2.30pm to put the rumours to rest once and for all. What is happening to CMC Markets?

CMC Markets' normally thundering public relations machine has suddenly gone quiet, and in its place is FD Third Person, a media agency "specialising in financial transaction support and issues and crisis management”, according to their website.

CompareShares did its best to get clarification for traders with existing accounts with CMC Markets. We put in numerous calls to internal public relations, Sydney reception, the New Zealand office and even the 1300 303 888 number and couldn't get anyone to comment. Phone calls rang out. According to FD Third Person, key staff were in meetings until late last night and again early this morning.

CMC Markets did not want to make an official announcement to the market until staff had been notified of the changes at 2.30pm today, was the official response.

It’s now official that managing director David Trew has been axed from the Group. Trew, who made headlines earlier this year when splurging on a $25 million trophy mansion in Point Piper (as reported in The Australian newspaper) is leaving the group, according to FD Third Person. And more staff cuts – “in non-client facing functions” – are scheduled for the Sydney office. CMC Markets shut its Perth office in August this year, and recently slashed Sydney staff by around 8 per cent.

Furthermore, the London head office will be taking the reins over its Antipodean businesses. CMC Markets’ business units, Sydney, New Zealand and Asia (Singapore, Hong Kong and Japan) will now report directly to London, states FD Third Person. To date, the Australian and New Zealand businesses came under the wing of former managing director Trew.

Two months ago, CompareShares reported on a series of events that had unfolded at CMC Markets, “An AVO, staff cuts and a trophy mansion – it’s all happening at CMC Markets.”

Back then, managing director David Trew denied the suggestion that staff cuts were a result of problems at CMC Markets. He insisted that further staff cuts were not anticipated.

Stay tuned - we'll keep you updated with any developments in this story.

So will the Savior…

[martin01]

Originally Posted by forex savior

So say news reports coming out of Australia. A few weeks ago, at the height of the financial panic, leading CFD provider Saxo Bank took a meat cleaver to their work force in a frenzied effort to slash costs. CMC now appears to be following suit. They had already laid off staff and closed their U.S. office and another office in Perth, Australia. But now more redundancies lie over the horizon and the company just held an emergency meeting for all their staff at a hotel in Sydney. Details below:
CompareShares.com.au - company news



So will the Savior…

Hello forex savior,

I have read your article. CMS is doing good as most of the CFD brokers are failing and this becoming inconvenient for traders. Most of the investors interested in entering forex market but not having proper knowledge about forex brokers have to face the CFD crises.

Well this is good news which you have given.

[Aviel Forex]

Originally Posted by forex savior

With the world financial system in chaos it’s never been more important to trade with a well capitalized firm. The CFTC has just released their latest net capital figures. Not a lot of changes from the last one. Only difference is that U.S. forex dealers have 30 fewer days to make it to the coming $20 million capital requirement deadline.

Financial Data for FCMs

The following firms have net capital below $10 million

MG Financial $5,393,000
Advanced Markets $6,786,000
Forex Club $7,558,000
Friedberg Mercantile $8,147,000
ACM $8,372,000
Ikon $9,544,000
Easy Forex $9,824,000
Hotspot $9,942,000

Not much change in capital for Advanced Markets, Forex Club and ACM. Swiss broker ACM still appears to be charging the proverbial machine gun nest with a butter knife. Is this firm really going to be able to put up $20 million in the coming months? Did they even know about this capital increase before they parachuted into the U.S. market? We’ll find out soon enough.

The following firms have net capital below $20 million

GFS Forex $11,451,000
MB Trading $12,767,000
ODL $14,870,000
I Trade FX $14,952,000
Alpari $15,786,000
IFX $18,623,000
FX Solutions $19,574,000

The following firms have net capital above $20 million

CMS Forex $20,199,000
PFG $21,345,000
Interbank FX $36,505,000
Gain Capital $67,906,000
GFT Forex $73,219,000
FXCM $91,840,000
Oanda $165,458,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new law going into effect in the weeks and months ahead.

I use FXCM in NY. Does anyone here have any experience with MB Trading ?

How do they compare to FXCM ?

Thanks in advance for any information that you can share with me.

[maxreturn]

Hello Aviel. What has your experience been with FXCM?

[Aviel Forex]

Originally Posted by maxreturn

Hello Aviel. What has your experience been with FXCM?

I am a IB there. I have no real issues with them. Service good. All in all I would say good. They are effecient !

[forex savior]

The CFTC has just released their latest net capital figures. The big news is that everyone is doing well. Firms are seeing big jumps in net capital as forex brokers appear to be raking in the cash in this volatile market. It doesn’t appear that anyone has had difficulty clearing the $10 million hurdle judging by the fact the NFA has not closed down anyone since Halloween (although AMIFX continues to report way below the $10 million requirement although keep in mind CFTC reports lag a full month behind the current date.) The only other change appears to be that IFX and FX Solutions have formally merged as IFX is no longer listed on the CFTC Report.

http://www.cftc.gov/marketreports/fi...fcms/index.htm

The following firms have net capital below $10 million

Advanced Markets $6,743,000
Friedberg Mercantile $8,164,000
ACM $8,891,000
Forex Club $9,615,000
Easy Forex $9,943,000

The following firms have net capital below $20 million

Hotspot $10,021,000
Ikon $10,424,000
GFS Forex $11,908,000
MB Trading $14,245,000
ODL $15,180,000
I Trade FX $17,258,000
Alpari $17,437,000

The following firms have net capital above $20 million

FX Solutions $21,197,000
CMS Forex $22,018,000
PFG $22,038,000
Interbank FX $37,596,000
GFT Forex $67,073,000
Gain Capital $77,580,000
FXCM $114,299,000
Oanda $168,344,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new $20 million capital requirement going into effect in the months ahead.

[forex savior]

Last month the S.S. Saxo Bank forced hundreds of employees to walk the plank in a furious effort to keep their Danish Longship from taking on any more water amidst the financial tsunami that has engulfed CFD brokers around the world. But it is another former shipmate of Saxo that has now taken to his Somalia-like pirate ship to fire pot shots at this listing to port Viking Broker. Ahoy it’s Charles-Henri Sabet! With parrot perched on shoulder and a black eye patch in place Sabet has Saxo in his sights…

According to Euromoney Magazine in an article titled “Charles Henri Sabet Bites Back in Saxo Saga” Sabet says that he was exiled to Davey Jones locker because of a shareholder dispute, not because of an SFBC investigation of alleged insider trading.

Charles-Henri Sabet bites back in Saxo saga /Euromoney magazine

“This is really about an argument between shareholders,” says Sabet. “I still own around 5% of Saxo and I was not happy with what I saw as the bank’s domestic focus. I offered to leave, but I wanted Saxo to buy my shares as was agreed when it took over Synthesis,” he adds. Sabet says that Saxo is now focused on becoming a well-known name in Denmark, including giving backing to the small, centrist Liberal Alliance political party.

So how did this investigation come about? Euromoney states:

Saxo has declined to comment on whether or not the investigation came about because it informed the regulator of an irregularity, rather than the SFBC acting because it suspected suspicious activity. But a letter from the commission makes it clear it was informed by Saxo of the issue.

So instead of paying Sabet his share of Saxo’s booty the scallywags in Denmark simply ratted him out to regulators? Shiver me timbers that’s a low thing to do to a mate. But Sabet wasn’t the only one sent to the brig.

Sabet says he is also particularly upset that his dismissal was followed by a purge of his former employees, including his chauffeur. He believes that he will be fully exonerated when the SFBC reports its findings. In the meantime he is preparing to take legal action to clear his name and to complete the deal that was agreed when he sold Synthesis Bank to Saxo in September 2007; this included the verbal agreement to purchase his remaining shares in the bank.

Yarrrgh matey, Saxo ain’t likely to depart from its treasure anytime soon. This Sabet fellow could be waiting a long time before he sees one gold doubloon from the cash strapped folks in Denmark. I reckon Sabet would have a better chance demanding ransoms from oil tanker owning Saudi princes than from a forex and cfd broker that had been spending money like a drunken sailor on shore leave prior to the financial panic.

Arrgh, Sabet best crack open a bottle of Rum and batten down the hatches cause Saxo will fight him to the last cannon ball over that 5% share. To be continued I’m sure.

[forex savior]

The forex market has long been known as the Wild West of Finance due to its unregulated nature. But the frontier is being tamed and it now appears the day of the unregulated Introducing Broker is drawing to a close. While the CFTC has not yet released its new Forex Dealer rules to the public the NFA just issued a preliminary set of guidelines for all introducing brokers who are now required by law to be licensed: National Futures Association | Compliance

Among the rules, IBs must maintain net capital of $45,000. Aside from other requirements like proficiency exams and disclosure documents the NFA is doing background checks which require finger printing:

NFA requires all individual applicants to submit fingerprint cards, which are sent to the Federal Bureau of Investigation (FBI) to determine if the applicant has a criminal record.

This should help drive some of the industry’s worst cattle rustlers out of the market and into a new line of work, like holding up banks instead...

It remains to be seen just how onerous the new rules from the CFTC will be but with the NFA releasing this guide now the CFTC shouldn’t be too far behind.

[forex savior]

The U.S. retail forex industry appears to be soaring over the new capital requirements by leaps and bounds. October showed an across the board increase in virtually every dealer’s net capital. Still, for some firms it is a long way to $20 million. And while small firms like ACM and Advanced Markets were able to meet the first barrier the Savior will be watching closely to see if they can keep it up.

Financial Data for FCMs

The following firms have net capital below $15 million

Advanced Markets $10,163,000
Hotspot $10,559,000
Easy Forex $10,891,000
ACM $11,855,000
GFS Forex $12,503,000
MB Trading $14,522,000

The following firms have net capital below $20 million

Ikon $15,033,000
Forex Club $16,489,000
Alpari $18,212,000
I Trade FX $18,411,000
ODL $19,991,000

The following firms have net capital above $20 million

PFG $21,809,000
CMS Forex $25,162,000
Interbank FX $40,892,000
FX Solutions $43,570,000
GFT Forex $76,980,000
Gain Capital $96,371,000
FXCM $122,924,000
Oanda $170,982,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new $20 million capital requirement going into effect in the months ahead.

[forex savior]

The National Futures Association has passed some new rules that all traders should be aware of ASAP:

http://www.nfa.futures.org/news/PDF/...Adj_112408.pdf

A Forex Dealer Member may not cancel an executed customer order or adjust a customer account in a manner that would have the direct or indirect effect of changing the price of an executed order…

Translation- No more “adjustments,” unless these adjustments meet strict NFA standards.

Forex Dealer Members may not carry offsetting positions in a customer account but must offset them on a first-in, first-out basis.

Translation- no more hedging of the same position.

These are profound changes. How many times have traders complained about profits being “removed” from their accounts? Well, if you trade with a NFA registered firm those days appear to be over. The hedging prohibition may upset some traders but truth be told there is little logic behind holding the opposite positions in the same currency pair. Still, you would think traders would be allowed to trade as they see fit without the nanny state running around dictating what positions you are allowed to hold.

In any case the evolution of FX trading continues…