Hey, Tom
My bad. I failed to see the third [B]Tallinex[/B] post (the one addressed to me), prior to seeing your post.
Consequently, without context, your post didn’t make much sense to me.
Sorry if I came off a bit snarky — although [I]snarky[/I] is something I do [I]often,[/I] and [I]on purpose.[/I]
No offense of any kind was taken. I hold you in high regard for all of your relentless dedication to the community so benefit of the doubt on my end is always given. However, I do appreciate the courteous response.
Hello, [B]Tallinex.[/B] Welcome to Babypips, and welcome to this thread. We don’t have many brokers dropping in on us here, so it’s rather special that you did!
You might want to consider joining the Broker Aid Station forum. That’s where official representatives of participating brokers can post news and information about their firms, and answer questions from Babypips members.
You’ll have to go through some sort of vetting process with the Babypips admin, in order to get onto that forum — but, I can’t tell you any more about it than that, because I’m not part of the Babypips administration.
It’s my impression that brokers on that forum are pretty much free to advertise and promote their firms, without restrictions — which is not the case elsewhere on the Babypips site (Babypips takes a very dim view of [I]unpaid[/I] advertising here).
Regarding the comments in your post #2408 —
I agree with you that “regulated” does not necessarily mean “well capitalized, well managed, and honest”. But, I think in most cases it [I]does[/I] mean that the worst offenders (the grossly under-capitalized brokers, the bucket shops, and the outright scams) have been identified and run out of town.
However, I grant you that even the best regulation is far from foolproof, as your list of four failed U.S. brokers illustrates.
Regulation makes it easier for retail customers to perform their due diligence, because it provides a starting point for checking the history and performance of a broker.
On this thread, we have attempted to vet some unregulated offshore brokers who do not reveal their place of domicile, the names of their owners, or how long they have been in business. And, of course, they fail to reveal their past run-ins with the law. Digging up that sort of information can be a difficult task for a prospective customer who is trying to perform proper due diligence.
On the other hand, in the case of most regulated brokers, those facts are readily available from their regulator — which makes performing due diligence on those regulated brokers simpler and more certain.
To say all of this in another way, with non-regulated brokers we often have to do [I]extra work,[/I] in order to get the data we need to make informed decisions about them. That is, [I]extra due diligence[/I] is required.
The label [I]“use (or exercise) extra due diligence”[/I] is the gentlest of the suggestions we make. We have tagged certain brokers with this label: [I]“exercise extreme due diligence”[/I]. And, in at least one case, we have tagged a broker with: [I]“serious warning: exercise extreme due diligence with regard to this broker”.[/I]
So, I hope you will consider all of this, and feel less offended by the label we have put on Tallinex.
Finally, you are correct that location has a lot to do with the choice of labels. When we started this thread, 4 years ago, the brokers we were interested in were in Europe, Australia, and New Zealand. There weren’t any forex brokers (at least, none that we had heard of) in Cyprus, Mauritius, Belize, Nevis, St.Vincent, or the Marshall Islands. Today there are forex brokers in all of those locations, and many others.
As brokers have fled the over-regulated areas of the world, where the U.S. CFTC is attempting to be the World Forex Police, those brokers have typically ended up in countries without well established capital markets, without financial regulation, and in many cases without legal systems that inspire the confidence of Europeans or Americans.
At one time, we had an Australian broker in our list of U.S.-friendly brokers who decided to stop doing business with Americans. However, they referred us to their new “parent company” in Vanuatu, and invited us to open accounts and send money to Vanuatu. As you may have noticed, we have not listed any Vanuatu brokers in the Offshore Broker List.
So, please forgive us, if we’re slightly skittish about forex brokers who decide to settle in certain exotic locales.
If the Tallinex move from Estonia to St. Vincent is evidence that Tallinex is getting [I]stronger,[/I] and not weaker, then I’m sure that fact will manifest itself. And, as we get to know one another better, let’s look ahead to the time when we can remove that pejorative label that’s offending you.
By the way, if we’re going to be friends, how about a first name — so I don’t have to call you “Tallinex”?
That question has been removed from the FAQ page on the FinFX website — more evidence that FinFX is severing ties with American customers.
Later this weekend, I will remove FinFX from Group 1, and move them to Group 2.
We should monitor the brokers on our List for indications of insolvency or other problems, as a result of the fallout from the SNB actions on Thursday.
Edit: Alpari (UK), now bankrupt, will be removed from Group 2.
Second edit: Alpari has rescinded their previous announcement regarding bankruptcy, and now claims to be seeking a way to reorganize, either through an outright sale of the firm, or through an infusion of capital from a “white knight” investor. For now, I will leave Alpari (UK) in Group 2, pending their financial survival. We all wish Alpari the best.
FXMC might be bankrupt as well:
Swiss Franc Stunner Claims Victims, Currency Broker FXCM Bludgeoned - Forbes
Having already posted my “2-cents” regarding those “not regulated” and “extra due diligence” tags, here’s an update to illustrate the point:
Alpari (UK): Insolvent
Global Forex (NZ): Insolvent
FXCM: Insolvent
All regulated brokers… all “on-shore”… and none would be marked “use extra due diligence” in this thread.
And the moral is?
Being regulated (or not) and/or being on- or off-shore has little bearing on the ethics, risk assessment capabilities or fiscal fortitude of a broker. Learn to look beyond the wrappings - there will always be bad apples in every barrel, but it’s not always the ones you expect.
Tried calling FinFX today but it was too late. But they sent out a letter today stating that they were able to limit their losses during the Swiss move and will continue to move forward. While that does not affect us too much at this point, I am still very interested to find out if the CFTC put pressure on them or if this new decision is due to a new regulatory body in Finland.
Yes, of course being regulated causes more problems than it solves. This is part of the reason why this thread exists - because of the Babypips, Clint and the CFTC (sorry Clint that you and the CFTC are listed together, but it is true :D).
However, regulation is not always a bad thing. As Clint mentioned previously, regulation gives us a starting point from which to begin our due diligence. Regulators have far more resources and accessibility to brokerages than any standard Forex trader. Thus, it provides us with a bit more peace of mind to move forward and take the plunge.
You made the following point below in your last post:
While I understand what you are getting at, this is not the point. You did mention that regulation does not determine sustainability and the ability to manage risk. The most important factor is that the company is managed properly. If this is the case with Tallinex, then no regulation is needed. However, the failure of these brokers (to which you have alluded) was due to the Swiss Franc moving more than any currency has done since World War I - a full 3,600 pips compared to a measly 1,200 pips on the day of the initial Swiss Bank intervention. If the conditions and timing are right, it could have been other brokers that went out of business instead (including Tallinex).
Just because these brokers failed does not mean that they were not properly managing themselves, it means that their means of management were such that the Swiss movement multiplied by their current exposure far exceeded the collateral in their client’s accounts. Good businesses fail daily, even if they are doing all they can to manage themselves properly. This has nothing to do with a failure of regulation neither. It is because of this regulation that the clients with funds still in their accounts are able to withdraw, as their funds have been segregated. Each of the three brokers you have mentioned have been reported to have their remaining client’s funds in tact. Many businesses (and perhaps Tallinex) operate in this way automatically because it is the smart thing to do. However, does segregation automatically guarantee that the broker will still honor withdrawal requests after having their corporate bank account and liquidity provider collateral wiped out? Of course not.
So how about your first name? I think I can speak for many of us by saying that we appreciate having you as a part of our community, and at our disposal. Your opinions regarding the “use extra due diligence” have been noted by the thread creator but should remain as is for now. Tallinex will prove its integrity to the FX community through both consistency and the passage of time. As time goes on, trust will build, and our willingness to deposit will increase. Your integrity is not bolstered by belittling or stepping on other brokers, but instead telling us about [B]Tallinex[/B], being accessible, and getting past the format on page one of this thread so we can discuss more important things. We are glad to have you here helping us get to know you. Perhaps I will try out your brokerage in due time.
I did a quick review of the 16 brokers in Group 1 of our List, to see what they are saying about the SNB crisis, and how they have weathered the crisis (which many people are now calling [I]Black Thursday[/I]).
Here are the results:
[B]AssetsFx (Finland)[/B] — from their website (1/17/15)
Announcement!
AssetsFx did not suffer any losses caused by the CHF movements. Trading is normal and we will continue to operate normally.
[B]FinFX (Finland)[/B] — from their website (1/17/15)
COMPANY NEWS
FINFX REAFFIRMS ITS BROKERAGE MODEL IN LIEU OF SNB DECISION
Friday 16.1.2015 • Due to the Thursday’s dramatic move on the Swiss franc by the Swiss National Bank, a number of brokers have announced that they “can no longer meet regulatory minimum capitalization requirements because of significant losses”.FinFX would like to inform our clients, that our business was not affected substantially. FinFX will continue to operate normally.
[B]Renesource Capital (Latvia)[/B]
(website is down as of 1/17/15)
Edit: 1/18/15, 0130 GMT — the Renesource website is back up; the link we provide in our listing now connects to their Russian language site; I will change the link shortly
on Renesource’s English language site, there is no mention of the SNB crisis
[B]Sensus Capital Markets (Malta)[/B] — from their website (1/17/15)
“BUSINESS AS USUAL” AT SENSUS AFTER CHF-MOVEMENT
Dear Client,
We would like to inform you that Sensus Capital Markets was not strongly effected by the happenings in CHF pairs yesterday. There were minimal losses, but the capital buffer was adequate to absorb those. Sensus remains a strong player in the industry and will continue to service you with our high standards as always.
Best regards,
Your Sensus Team
[B]FXGlory Ltd (Republic of Georgia)[/B] — also licensed in Bulgaria
no mention of the SNB crisis on their website as of 1/17/15
(note: we have this broker listed in UAE; I will change that to read Republic of Georgia)
[B]Profiforex (Seychelles)[/B] — from their website (1/17/15)
16 JANUARY 2015
Profiforex policy regarding CHF volatility on 15 January
Due to the high volume of inquiries received today regarding the financial status of Profiforex Corp. after yesterday’s CHF volatility we would like to assure our clients that CHF volatility didn’t influence Profiforex. Profiforex transmitts all the clients’ orders directly to the interbank market so there is no way in which Profiforex could be affected by such a high volatility of Swiss Frank yesterday.
Thank you for staying with us!
15 JANUARY 2015
High volatility of the currency pairs with CHF
Swiss National Bank surprised markets on Thursday by announcing it will remove the 1.20 EUR/CHF floor and it is also lowering the rate on sight deposit by 50 bps to -0.75%. Swiss Frank has grown by 20% within minutes. As the result many of our clients had either a huge negative balance on their accounts (reaching 1000% of the deposit) or have gained hundreds percent of profit from their deposit.
[B]Real Trade (Seychelles)[/B]
no mention of the SNB crisis on their website as of 1/17/15
they show currency quotes, including EUR/CHF, as of 2100 GMT Friday 1/16/15
[B]ForexBrokerInc (Marshall Islands)[/B] — from their website (1/17/15)
We would like to inform you that now you can trade on the following pairs:
USD/CHF
AUD/CHF
CAD/CHF
CHF/JPY
EUR/CHF
GBP/CHF
NZD/CHF
Thank you!
2015-01-15 (note: this message was posted [U]late[/U] on Thursday 1/15)
Please be informed that liquidity providers do not provide the prices for the following instruments:
USD/CHF
AUD/CHF
CAD/CHF
CHF/JPY
EUR/CHF
GBP/CHF
NZD/CHF
For more information, please contact dealing department.
2015-01-15 (note: this message was posted [U]early[/U] on Thursday 1/15)
[B]Forex Metal (Panama)[/B]
no mention of the SNB crisis on their website as of 1/17/15
there’s a box on their homepage labeled [I]News and Promotions[/I] - here’s what they’re currently saying:
News
Market review for 05.06.14: There were certain fluctuations in currency pair after ECB decision.
— [U]news from May 6, 2014[/U] ? — is this broker even awake?
[B]FX Choice (Belize)[/B]
no mention of the SNB crisis on their website as of 1/17/15
under [I]Company News[/I], they have posted this on Friday 1/16:
Bitcoin denominated accounts
Announcement from 16/01/2015
Dear Clients,
We are extremely excited to let you know that you are now able to open Bitcoin denominated accounts with us. Bitcoin is a new currency that was first introduced in 2009. Bitcoin transfers are made with no middle men which means, no banks are involved! In addition to that, international payments are easy and convenient because Bitcoins are not tied to any specific country or subject to regulation.
Please contact our support for more information — Bitcoin is their big news for Friday?
[B]Real Forex (Belize)[/B]
no mention of the SNB crisis on their website as of 1/17/15
on their homepage, the window displaying live FX quotes is grayed out and carries a label reading “Coming Soon” — what’s up with that?
they have a page labeled “Forex Daily Reviews”, and the latest posting is dated 10.4.13 (April 10, 2013) — is this broker awake?
[B]IKOfx (British Virgin Islands)[/B]
no mention of the SNB crisis on their website as of 1/17/15
under Company News, their most recent posting is dated July 17, 2012
however, they have a live TV thing reporting market news; the most recent broadcast, dated 1/16/15, refers to the market turmoil created by the SNB crisis, but does not mention the effect, if any, on IKOfx;
their live currency quotes are up to date as of the Friday 1/16/15 close
[B]TradersWay (Dominica)[/B] — from their website (1/17/15)
TradersWay Remains Stable After Swiss Franc Crisis
SNB decision and CHF volatility did not affect TradersWay’s financial position.
January 16, 2015. TradersWay, a prime on-line FOREX and CFD broker, is pleased to ensure all clients and partners that because of our strict risk management policies and high capitalization, we were able to limit our exposure to the Swiss Franc following the SNB Statement and minimize losses.
Following the Swiss National Bank Policy Statement on Thursday, there was substantial volatility in the Swiss Franc affecting all CHF currency pairs. This has unfortunately caused many brokers significant losses, some of which have closed down permanently and filed bankruptcy.
We adhere to high business standards and management processes that have allowed us to overcome the unprecedented volatility. TradersWay would like to inform our clients that our business was minimally affected and we will continue to operate in its normal fashion.
[B]PaxForex (St. Vincent)[/B]
the only mention of the SNB crisis on their website is a blog entry apparently copied and pasted from some news feed:
SNB Abandons Minimum Exchange Rate
15/01/2015 0 Comment by Goran
there is no mention (as of 1/17/15) of the effect, if any, on PaxForex’ financial condition
[B]SmartTradeFX (St. Vincent)[/B]
no mention of the SNB crisis on their website as of 1/17/15
their website displays a few currency prices which each appear to be off from Friday’s close by several pips, and much of their site is badly out of date: their [I]Forex Webinars[/I] page says that the next upcoming webinar will be on March 17, 2013, and the most recent posting on their blog page was November 5, 2014
[B]Tallinex (St. Vincent)[/B] — from their website (1/17/15)
TALLINEX LATEST NEWS…
SWISS NATIONAL BANK ANNOUNCEMENT
The extreme market activity that followed the Swiss National Bank announcement on January 15th has caused ripples across all financial markets. Many brokers suffered huge losses, and several high-profile brokerages (such as Alpari (UK) Limited) have become insolvent as a result.
We therefore considered it important to assure all clients that Tallinex has essentially been unaffected by the situation.
Thanks to the diligence and skill of our risk management team (who have been monitoring CHF pairs closely for the past year), plus the risk management systems and business model employed by Tallinex, swift and decisive action was possible - this prevented the excessive losses experienced by other brokers, resulting in no negative impact on Tallinex, our clients or their trading conditions.
We are therefore continuing to provide the superior trading conditions and deep liquidity that have become our trademark.
As a precautionary measure, we have temporarily increased the margin requirement for EURCHF to 8% and all other CHF pairs to 5% until the situation with CHF pairs stabilises.
As always, our customer support staff are on hand and happy to assist if you have any questions.
.
[B]Alpari-UK[/B] has updated their notification on their website, indicating that they have not formally declared insolvency.
The recent move on the Swiss franc caused by the Swiss National Bank’s unexpected policy reversal of capping the Swiss franc against the euro has resulted in exceptional volatility and extreme lack of liquidity. Retail client funds continue to be segregated in accordance with FCA rules. For the avoidance of any doubt and notwithstanding previous announcements by the company, Alpari (UK) Limited has not entered a formal insolvency process. The board of directors are urgently considering all options including a sale and are liaising closely with the FCA. We hope to make a further announcement shortly.
[U]The List has been updated[/U]:
[B]FinFX (Finland[/B]) has been moved to Group 2.
Our link to the [B]Renesource (Latvia)[/B] website has been corrected.
The FXGlory listing has been corrected to read [B]FXGlory (Republic of Georgia)[/B].
The listing for [B]Alpari (UK)[/B] on page 4 has been updated to indicate that the broker is in reorganization.
Current count: Group 1 - 15 brokers; Group 2 - 149 brokers.
Excellent response by tomd100, so to wrap up this train of thought…
Tallinex is not specifically against regulation - there are advantages to it, but there are disadvantages too.
In an ideal world, more workable systems would make regulation an absolute asset to brokers and traders alike, but we don’t live in an ideal world.
Regulators basically err on the side of ultra-extreme caution in all matters (because they implement a “one size fits all” rule book), and that simply stifles business. It also results in a disproportionate financial burden on brokers, who need to comply with an unbelievable array of rules, reporting requirements and dictates - most totally unrelated to the safe operation of their business (the most obvious, being told that US clients are not permitted!)
But, in truth, the real failure of regulation is that it relies on “reporting” to raise red flags… if the reporting is wrong (through lack of clear guidance from the regulator, or outright intent… i.e. PFG Best, Madoff, etc.) then it all falls apart. If regulators made frequent visits to brokers and actually looked for potential issues (as an auditor would) then the burden would be far lighter on brokerages and issues would be identified before they became problems… but failure to identify potential issues would then point the finger of incompetence at the regulators, and we all know they won’t allow that possibility!
That aside, the point I wanted to really get across is that regulation (more specifically, lack of) is most frequently used for scaremongering, and that’s morally wrong. Our systems of law mostly argue that a person is presumed innocent until proven guilty, but an unregulated broker is presumed “probably guilty until proven innocent”. Human nature means we’re more likely to spend time complaining (justified or not!) than praising, so balance of opinion always tends to lean towards the negative.
'nuff said!
Paul (name provided as tomd100 asked nicely)
[QUOTE=Clint;677669]I did a quick review of the 16 brokers in Group 1 of our List, to see what they are saying about the SNB crisis, and how they have weathered the crisis (which many people are now calling [I]Black Thursday[/I]).
Here are the results:
Your dedication to helping others is commendable. I am continually amazed at how dedicated you are to helping others. I don’t think people understand or appreciate the time and effort you put in. I for one just want to say THANK YOU!
It [I]is[/I] a lot of work. Thanks for noticing!
Of the [B]15 offshore brokers still standing in Group 1[/B] of our List, 9 of them had nothing to say on their websites about the SNB crisis, as of Saturday, 1/17/15 (see post #2423)
I did another scan of those 9 brokers, and there has been [B]no additional information posted[/B] by any of them, as of 0600 GMT, Monday, 1/19/15.
The nine brokers who remain silent about the crisis, and how they weathered it (if at all), are:
Renesource Capital (Latvia)
FXGlory (Republic of Georgia)
Real Trade (Seychelles)
Forex Metal (Panama)
FX Choice (Belize)
Real Forex (Belize)
IKOfx (British Virgin Islands)
PaxForex (St. Vincent and the Grenadines)
SmartTradeFX (St. Vincent and the Grenadines)
Thank you Clint for your remarkable effort and research, you have been wonderfully helpful indeed- I just thought I would add in light of Black Thursday (Swiss This!) that whatever brokerage one eventually uses, it is prudent to only have one account per brokerage as I am finding out with FXCM that neg balances in one blown account will be paid for by raiding the ones that survived, a Forex.com rep said the same policy applies for them as well.
In my book that means there’s only six in that list worth considering trading with.
Clint, thanks for keeping on top of this thread. I literately just opened a live account with FINFX and now I guess I’m involuntarily a Tallinex customer now. Not sure how I feel about that now, hoping I’m in good hands.
Clint,
Take Tradersway of the list… They don’t take US clients no more…
Dan2:55:14 PM
Hello. Thank you for contacting us. How may I help you?
Benjamin 2:56:19 PM
HI… I open an account like 4 hours ago… Can someone look at my account so it could be verified…
Dan2:56:49 PM
Unfortunately we don’t accept US clients any more.
Benjamin 2:57:35 PM
y not
Dan2:57:56 PM
Company policy changed
Benjamin 2:58:04 PM
ok