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

[o990l6mh]

Originally Posted by forex savior

The stampede of small brokers out of the U.S. market continues. GFS Forex and Futures has announced they are shutting down their U.S. forex operation. GFS has purchased City Credit Capital in the U.K. and is relocating their business to London. However, they are no longer allowing U.S. customers to trade forex with them:

GFS Forex & Futures, Inc.


Once again, the moral of the story is to stay clear of these smaller U.S. based forex dealers until they can clearly meet the $20 million capital requirement and demonstrate that they can adapt to the NFA’s new rules and regulations. Having your account forcibly liquidated with barely any notice should not be part of the bargain when you open up an account with a forex dealer.

The CFTC should be releasing their new financial data any day now. It should be required reading for anyone with an account in the U.S.

Sounds like US citizens can still trade with them, but GFS isn't allowed to automatically transfer existing accounts. That's how it reads to me.

[forex savior]

Originally Posted by o990l6mh

Sounds like US citizens can still trade with them, but GFS isn't allowed to automatically transfer existing accounts. That's how it reads to me.

GFS is keeping their office open for customers who want to trade futures with them.

[forex savior]

The CFTC has just released their latest net capital figures. With I Trade FX and GFS Forex departing the U.S. market that leaves only a little more than a dozen firms left standing.

Financial Data for FCMs

The following firms have net capital below $20 million

Easy Forex $15,552,000
Ikkon Royal $16,423,000
Alpari $16,557,000
MB Trading $17,031,000
Advanced Markets $19,686,000

The following firms have net capital above $20 million

Forex Club $21,354,000
CMS Forex $29,360,000
PFG $30,444,000
Interbank FX $38,393,000
FX Solutions $45,032,000
GFT Forex $87,169,000
Gain Capital $95,879,000
FXCM $113,463,000
Oanda $161,723,000

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 that is about to go into effect.

[forex savior]

FXDD’s Ominous Anniversary

FXDD is making waves these days by refusing to adopt the NFA’s new hedging rule:

Francesc’s Weblog » Retail Forex Industry - FXDD fights NFA’s Hedging rule while FXSolutions launches Gold & Silver trading

To our valued clients,

In our effort to provide the best solution for your trading regarding the NFA’s new rule on hedging, please know that we have been in contact with the NFA and have offered several solutions which we believe will accommodate almost all types of trading strategies and comply with the NFA rules. Our discussions with the NFA are ongoing and we will keep you advised. In the mean time, know that FXDD is making no immediate changes to any platforms and that you will be fully advised prior to any proposed changes.

The FXDD Team.

How can they do this? Simple. FXDD still isn’t licensed by the NFA.

BASIC Details

It’s easy to thumb your nose at regulators when you don’t actually have to answer to them. FXDD applied to become a member of the NFA in April of 2008. One year later their application remains unapproved.

Should traders be concerned about this? Absolutely. Not only is FXDD unlicensed (and therefore in possible violation of U.S. law) but now they are actually thumbing their nose at the very regulator who they are seeking to get that license from.

This is not prudent behavior on FXDD’s part and traders should stay clear of this firm until they are actually authorized to operate inside the United States.

[dobro]

I asked them almost a year ago re. certification and they said it was pending. Nothing has changed since then I see. I got so tired of IBFX's requotes and "server busy, try later" that I closed a small funded acct and opened a demo only with FXDD - I like the fact that their daily close is 16:00 CDT. I don't have to wait up until midnight or thereabouts to trade a daily closing strategy. But I am afraid to open a funded acct. d.

[forex savior]

Interesting post from Francesc at FX Street regarding FXDD’s decision not to implement the NFA’s new hedging rule. Jim Green, Managing Director at FXDD, wrote in to say that FXDD “was not fighting NFA.” They’re just having “constructive conversations” with NFA about the new hedging rule:

Francesc’s Weblog » Retail Forex Industry - FXDD Fighting NFA Hedging Rule a Misleading Information. Apologies FXDD

“Dear Francesc: It has been some time since we last communicated. Although FXDD enjoys the coverage it (usually) receives on FXstreet, your recent headline was somewhat misleading and I want to state for the record that FXDD is not fighting the NFA on the hedging rule. As you know, FXDD is pending with the NFA and we discuss our application with the designated parties at the NFA. Our discussions with the NFA should not be interpreted as “fighting.” We have had and continue to have very constructive conversations with the NFA in terms of the practical application of the new rule and, for purposes of the rule, what actions are permissible.

I respectfully ask that you clarify our position with your readership.”

Ok. FXDD may not believe they are fighting with NFA, but how else should NFA interpret FXDD’s decision not to implement the new hedging rule?

Of course, in fairness to FXDD, why should they implement a regulatory rule that will be harmful to their business if this same regulator continues to stall on their license application? This could be FXDD’s way of saying “give us a license, then we’ll implement your rules.”

But is it wise to take on NFA like this? This is why traders should sit on the sidelines until FXDD gets that license. They are playing a game of chicken with regulators. And in the current climate we are in where regulators are under enormous pressure to crack down on rogue financiers no trader wants to be in the middle of what could be one ugly head on collision.

[forex savior]

They are both stuck in bankruptcy with creditors (and traders) waiting in a line that stretches around the block. Let that be a lesson to anyone who owns shares in General Motors or has an account with an unlicensed Swiss Broker.

Here are the details of the Crown Forex Bankruptcy:
Francesc’s Weblog » FINMA Opens Bankrupcy Process of Crown Forex S.A

Dear clients,

The Swiss Financial Market Supervisory Authority (FINMA) has rendered on May 18, 2009 a decision opening the bankruptcy of CROWN FOREX SA as of Tuesday May 19, 2009 at 08:00 am (Swiss time).

The decision will be published on May 29, 2009 at 10:00 am (Swiss time).

Philippe von BREDOW and Laurent WINKELMANN have been appointed as bankruptcy liquidators by the FINMA.

Effective immediately, as of the date and time of the bankruptcy opening, the activities of CROWN FOREX SA are suspended, the company, its Directors and officers are forbidden to make or receive payments, and all the clients’ open positions are closed.

We thank you to communicate to the liquidators, until June 30, 2009, in writing the following :

1. Account Number and relevant details;
2. Open positions as of Tuesday 19 May 2009 at 08:00 (Swiss time), together with supporting documents thereof;
3. Any additional claim you may have toward CROWN FOREX SA;
4. Any debt you may have toward CROWN FOREX SA.

Sincerely
Philippe von BREDOW - Laurent WINKELMANN
NOTTER MEGEVAND & PARTNERS
Place Edouard-Claparède 3
1205 Genève
SWITZERLAND
p.vonbredow@nomea.ch
l.winkelmann@nomea.ch

This is why traders need to beware opening an account with any Swiss broker that doesn’t have a banking license. Notable Swiss brokers like ACM, DukasCopy and MIG have all applied for licenses. But they do not yet have that license. Beware opening an account with these firms until they do, lest you end up like the poor sods at Crown Forex.

[forex savior]

Michael Greenberg at Forex Magnates has released an interesting new survey on forex broker trading volumes (in the billions).

Top retail Forex brokers report well over $100B in daily traded volume | Forex Magnates

Monthly Trading Volume

1. FXCM $560,000,000,000
2. Oanda $338,000,000,000
3. Saxo Bank $225,000,000,000
4. Gain $200,000,000,000
5. GFT $175,000,000,000
6. ACM $150,000,000,000
7. PFG $85,000,000,000
8. IBFX $80,000,000,000
9. Alpari $60,000,000,000
10. IG Index $60,000,000,000

This is a useful tool for determining a broker’s size and stability (in addition to the net capital numbers.)

The following firms have net capital below $20 million
Easy Forex $15,552,000
Ikkon Royal $16,423,000
Alpari $16,557,000
MB Trading $17,031,000
Advanced Markets $19,686,000

The following firms have net capital above $20 million
Forex Club $21,354,000
CMS Forex $29,360,000
PFG $30,444,000
Interbank FX $38,393,000
FX Solutions $45,032,000
GFT Forex $87,169,000
Gain Capital $95,879,000
FXCM $113,463,000
Oanda $161,723,000

[forex savior]

The CFTC has just released their latest net capital figures. These appear to be the finalists who have survived the net capital guillotine:

Financial Data for FCMs

The following firms have net capital below $20 million

Easy Forex $15,549,000
Ikkon Royal $16,355,000
MB Trading $17,100,000
Advanced Markets $19,796,000

The following firms have net capital above $20 million

Alpari $20,975,000
Forex Club $21,795,000
CMS Forex $29,649,000
Interbank FX $36,507,000
PFG $36,843,000
FX Solutions $41,546,000
FXCM $60,472,000
GFT Forex $80,693,000
Gain Capital $90,801,000
Oanda $159,739,000

[o990l6mh]

Originally Posted by forex savior

The CFTC has just released their latest net capital figures. These appear to be the finalists who have survived the net capital guillotine:

Financial Data for FCMs

The following firms have net capital below $20 million

Easy Forex $15,549,000
Ikkon Royal $16,355,000
MB Trading $17,100,000
Advanced Markets $19,796,000

The following firms have net capital above $20 million

Alpari $20,975,000
Forex Club $21,795,000
CMS Forex $29,649,000
Interbank FX $36,507,000
PFG $36,843,000
FX Solutions $41,546,000
FXCM $60,472,000
GFT Forex $80,693,000
Gain Capital $90,801,000
Oanda $159,739,000

What! Can this be right? What has FXCM been up to? Been buying other companies or something I guess. If not it would be interesting to know why their capital has dropped like a stone.