Ask your broker IBFX to point you to the corresponding paragraph of the regulations to support their statement. The new CFTC regulations apply to brokers only and not to their customers. If a foreign broker chooses not to register with the US CFTC, the matter is between the broker and Uncle Sam, not between Uncle Sam and you.
The way I understand it, so long as a foreign broker does not SOLICIT U.S. customers, and they have no presence in the United States, then technically there should be no problems.
And even if by some odd reason it violates some paragraph somewhere, I really doubt that you will be in trouble over it. Its really just not worth it for the CTFC to individually punish retail traders. As long as you make out the annually required checks to the US treasury and your state and local municipality, nobody should come knocking on your door.
The US government has no reason to go after the US retail traders simply because the new US CFTC rules do not impose any restrictions on US retail traders but on foreign brokers servicing them instead.
As for foreign brokers, their business activity is regulated by their domestic financial legislations, not by the US one. The domestic financial legislations of most countries do not prohibit their financial institutions from servicing US customers who are subject to the same laws as all other foreigners.
Lastly, I am truly amused at the intellectual level of the CFTC CEO Gary Gensler who put up such rules. I wonder what his line of argument would be. “Yes, we can”? 
Rest assured that idiot is lying in his $50,000 bed thinking he just did a major service to the “investment community”
As Rob Booker put it, the guy cut his teeth trading in Goldman where they don’t need high leverage because they are moving millions by the trade.
thanks for the new post
Well here in Oz we can’t open an account with os companies.
When I was starting FXing I wanted to open a micro account so I followed all the links, got to the rego account bit and was redirected to a nice page that informed me that Australian citizens must open an account with an Oz broker so no micro brokers here and I got a mini account 
.
This is to stop money laundering.
My point being that there are precedents out there to stop people from trading with os companies.
Here’s a great new song dedicated to the CFTC. So what does anyone think???
YouTube - CFTC (Babysit Me) by R.S. featuring L~Reece www.adultcontemporaryhiphop.com!
BTW… here are the lyrics to that song. Comments are welcome.
(first)
" You should also read the lyrics to the song, CFTC (Babysit Me), courtesy of John Lothian. Lyrical excellence is bolded: " from comentator, then lyrics…
"Yeah…yeah man. This right here? This is dedicated to the CFTC. The Commodities and Futures Trading
Commission Man. Some real FOREX traders. All risk,no reason. Let’s go baby…
[REFRAIN]
C F T C
Why ya wanna babysit me?
Uh oh O-oh
[REFRAIN]
I’ll take down and begun they taught me leverage 10:1. Now you don’t make a living for me how you make decisions for me?
Weather the storm, thunder to come, used to leverage 200:1.
They prayin for my self destruction, God and friend I smell corruption.
It’s digusting. Old scam.
Fraud? Look, I’m a grown man with my own plan. Don’t babysit. Proposal makes a baby.
I need some room to make me rich. The 50:1 you make me quit.
You’re hiding behind consumer protection. Kicked us out, you move the direction.
Shift the markets get your profits - that is hell and reach for profits.
How you gonna tell me how to invest? Obama please get me outta this mess.
Now I’m stressed. This one’s for ages. The bill is 2,200 pages.
Makes me want to get a lawyer - I’ve got a question for ya.
[REFRAIN]
C F T C
Why ya wanna babysit me?
Uh oh O-oh
[REFRAIN]
I see Big Brother is watching my every move like my mother.
I’m going under fast. Who controls it makes me wonder.
Who’s the consume that consumer? I can’t move I’m the loser.
Dodd and Frank abuses changed the eyes. No more rumors.
Leverage is 50:1. Even 20 or some.
Now my money is done. 9-to-5 here I come.
It makes me want to cry out. They’re trying to fry my account. This world is crazy. Why they always push the little guys out?
This big the government. Keep us for they loving it.
Tell you more I love my p*ss. I’m mad a trader forward this.
Hate my job I’m bored with this cus I could go so long with this.
Take my profits and all the chips. We’ve got a new song for this.
[REFRAIN]
C F T C
Why ya wanna babysit me?
Uh oh O-oh
[REFRAIN]
CFTC wanted to be the hand that rocks the cradle. You know what I mean? "
I can’t say what the Dodd-Frank bill actually says, but I can tell you my Australian broker, GO Markets, is being forced to close my account on Oct 18th because I’m an American resident. There are exceptions. If my account is more than $10,000,000 then I’m good with them. There are other exceptions that I don’t qualify for also, such as being a large company of multi-millions, and a couple of others.
Now, you might say that the CFTC has no authority in Australia. WRONG! There is a thing called a ‘memo of understanding’ (MOU) between ASIC and the CFTC that the CFTC is leaning on to gain Australia’s compliance. Where else, and with whom else do they have MOU’s? I don’t know. All I know is my Government has squished my little business like a bug!
If I knew how to attach the email from GO Markets to this I would. But ignorance is not bliss in this case.
If you are interested contact me and I will gladly forward the email from GO Markets.
Got the same email from them - here it is:
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).
GO Markets is regulated under Australian Law and does not have any offices or operations based in the United States. This means that GO Markets is subject to the comprehensive licensing laws in Australia and not the US. However the recent changes adopted by the CFTC seek to ensure that retail Forex transactions offered to US residents can only be offered by entities registered through the CFTC and therefore subject to US regulations and laws. You may be aware that part of these new rules is the requirement to set minimum security deposits for transactions. The new rules require a minimum 2% security deposit for major currencies (i.e. leverage 50:1) and 5% (i.e. leverage 20:1) for all other currencies. This may place a restriction on your current trading activities.
Despite the fact that GO Markets is regulated under Australian law the regulatory regime of the CFTC seeks to impose its rules across all jurisdictions when it relates to Forex services being offered to US residents. The CFTC has a Memorandum of Understanding concerning consultation and cooperation in the administration and enforcement of futures laws and additionally the CFTC and ASIC are also party to the IOSCO Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and Exchange of Information. GO Markets has satisfied clients from all over the world who are attracted by quality products and services that we offer. We value your business and the trust you have placed in us to provide a quality trading solution.
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.We apologise for the inconvenience of this as the changes in US regulations are beyond our control. Please be advised that we will continually re-evaluate opportunities to offer services to US residents depending on changes to US laws etc. We may be in a position to advise you that we are able to accept US based residents in the future. You may also consider seeking your own legal advice as to how the regulations affect you or any company you operate through. Of course this is not a decision we wanted to make and we would have liked to continue to offer our services to US clients, but it is out of our hands due to the relationship between the CFTC and ASIC and is only brought about by the restrictive regulations recently put in place.
If you have any questions please do not hesitate to contact us and we will be only too willing to help.
Regards,
GO Markets Pty Ltd
what’s happening is just ridiculous.
What’s wrong with trading offshore, with a broker that offers 500:1 or 200:1??? Like: HotForex or AskOBid
nothing. fxopen is probably the best offshore, since they’re ECN.
FXOpen no longer accepts US customers after they got sued by the US CFTC for maintaining servers and telephone lines in the US while not being registered with the US CFTC.
I agree with someone who said that they want to shutdown this industry for good. And the reason for this is that, more and more people are making money from this industry, and clearly the rich are feeling threatened. They always find some excuse and they always tend to win. Capitalism, it’s either you or them. There is no ‘between’.
God I hate this game.
The leverage change in the US gives forex traders less flexibility.
Also, traders from both the US and abroad may look more to stocks and pair options, as these trading vehicles may provide investors with the opportunity to make large profits without the leverage factor.
I think that our margin should be zero as long as our average price is 100 pips in profit.
& I still want the 50:1 leverage TYVM :18:
Without wanting to offend anybody: Thank God I am not a US citizen.
Over the last 20 years US Governments, no matter whether Republican or Democrat, have shown a regrettable tendency to regulate (not to say supervise or control) every single tiny aspect of their citizens’ daily life. America just isn’t fun anymore; and (sorry to say it) America just isn’t FREE anymore.
I can understand the Government’s desire to protect its citizens from harm … that is a Government’s ‘job’, after all.
But there is a difference between taking measures to ensure a fair and secure environment for everybody and regulating every single thing.
The CFTC seems to think that the average US citizen is too dumb to make sound financial decisions.
Granted, many laymen have lost their money trading forex; but instead of educating them how to go about it properly, rules which are harming the whole retail industry are being introduced. And a weakened or wiped-out retail industry means less revenue for the Government as well.
In conclusion, the measures already taken and those proposed hurt everybody, without achieving anything positive.
My suggestion would be:
Let the CFTC create a simple webpage where people interested in trading forex retail have to pass a test, making sure they fully understand the concepts of leverage, margin and whatever the regulators feel is vital for safe and fair trading.
This would help traders (they can trade properly), brokers (they can earn money) and the Treasury (they increase tax revenue).
I think a ‘Retail Trader’s License’ would be simple to introduce and beneficial to all sides involved.
Cheers,
O.
Glad I’m in LA. Will move to San Diego and apply for Mexican residency (Tijuana, Tecate or Ensenada). Have many addresses where I can register a utility bill (required to obtain an offshore forex account). I’ll ‘commute’ between both my residencies.
In Texas you couldn’t get ‘an equity’ loan on your house, -Texas protecting it’s IGNORANT citizens? -It was THE ONLY state in the nation with such IDIOTIC ‘rules.’
Of course THE IDIOTS saw the light and now you can borrow on your ‘homestead.’
I don’t like this ‘FIFO,’ no hedging IDIOCITY and stupid LOW leverages!
Those freaking ‘fat asses’ (law makers?) don’t have anything to do but raise hell for the rest of us.
Still beating the dead horse years later? Move forward and adapt, find loopholes, be creative…or maybe pick up some different investment activities [B]like a real investor and not some bum FX speculator/gambler[/B].