And foreign brokers that do not have any “U.S. bank branches, offices or divisions” thereby having no US presence service all of their customers outside of the US jurisdiction under their respective domestic regulations and laws.
Oh, by the way - is there a single known case of the US CFTC managing to successfully shut down (or event attempt to shut down) a foreign broker with no US presence for non-compliance with any of the US regulations and laws?
I imagine the next big business is going to be providing US residents with legitimate addresses say in London for example and all the paperwork needed to open an account to trade to avoid the new margin requirements.
Not likely - any legitimate broker also asks for a copy of your government-issued ID.
In his statement on the implementation of the Dodd-Frank Act (under which the new retail Forex regulations were released), the CFTC Commissioner Bart Chilton has now said the following: [I]“The implementation of that good and historic law is in jeopardy if the CFTC doesn’t have increased resources. […] Implementing the most significant financial reform law ever will plainly require [B]a spending anomaly[/B].”[/I]
While I am not so sure as to how “good and historic” that law is, I completely agree with the US CFTC on the “spending anomaly” part. :)))
There are already 47 overseas retail Forex firms that have confirmed in writing they will continue accepting and servicing US customers after October 18, 2010 regardless of the recent US CFTC provisions: 301 Moved Permanently . Taking legal action against each one of them in courts of their domicile, as FXCM expects of the US CFTC (FXCM’s Lips Sealed by Impending IPO), will indeed be one heck of a “spending anomaly”. Moreover, by far not all nations have signed the IOSCO Memorandum of Understanding with the US CFTC (IOSCO Library Section), and some in all likelihood never will (such as Nevis or Dominica), providing no grounds whatsoever for court cases against brokerage firms domiciled there.
Shutting down is different… but sanctioning, imposing penalties and eventually arresting and deporting the CEO yes. And of course if they have no presence and they don’t do any business in US including accepting money from Us citizens, CFTC has no jurisdiction. Here is a link to CFTC enforcement actions from 2010 where I found a few Canadians and Swiss companies. And by the way I don’t remember having any solid proof of WMD in Irak but I remember Sadam started to trade OIL for EURO and that was unacceptable and we did invade. So if you think that “they” don’t know where Osama is you are totally wrong. All they need is to start the media wheels and make Osama a trader.
Enforcement Actions - CFTC
Well, in all honesty, I don’t think the US will invade every single country whose retail Forex brokers will refuse to comply with the US CFTC regulations. The same applies to “sanctioning, imposing penalties and eventually arresting and deporting the CEO”. What kind of sanctions or penalties can you apply to a firm that’s doing business completely outside of your jurisdiction (this does too include accepting funds from US customers, since those funds are accepted in the broker’s place of domicile)? As for the CEO, deporting him/her where? Many countries don’t extradite of their own citizens unless those were war criminals.
When it comes to dealing with US not many countries can refuse an extradition request and they don’t need to be war criminals.
But why do you think I got this letter from IamFX:
"IamFX would like to inform you about the recent announcement of the Dodd-Frank Wall Street Reform Act and the Commodity Futures Trading Commission’s (CFTC) final ruling regarding retail Forex Trading for U.S. residents.
The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act is a federal statute that states that effective October 18, 2010, any entity offering retail Forex and acting as the counterparty to U.S. residents must be registered with the CFTC and a member of the National Futures Association (NFA).
As a result of these Forex regulations being implemented by the Commodity Futures Trading Commission, IamFX Inc. (IamFX) is no longer offering Forex trading accounts to United States domiciled clients. To continue to offer the same superior technology to our US cliental, IamFX intends to transfer your account, including the cash balances and the open positions, to Capital Market Services LLC (CMS), a duly registered U.S. based Futures Commission Merchant and Forex Dealer Member of the National Futures Association. "
Here it goes my 15000 a year income to 7500 because of the leverage.
Guys,
Tokoloshe Man here:
This is for SEC regulated products and NOT for Spot Forex, which is what we are talking about, right? It has nothing to do with CFTC Spot FOREX regulations. The above refers to something I have seen on a regulated stock broker site in Europe. Have copy wording but can’t remember where it came from ,
quote
A ‘U.S. Person’ is defined as one who is permanently resident inside the USA.
The SEC’s interpretation of U.S. federal securities laws limits Non U.S. Broker-Dealers to working with those permanently resident outside the USA. Non U.S. broker-dealers cannot approach and/ or solicit U.S. resident persons because an Internet Web site is interpreted by the SEC as being the same as a telephone call to a client.
Non U.S. broker-dealers maintaining an Internet Web site can thus only accept a U.S. person if he or she has not been solicited either directly or indirectly through accessing their web sites under the ‘unsolicited’ exemption Rule 15a-6. U.S. customers wanting to work with Non U.S. broker-dealers can thus only approach Non U.S. broker-dealers under Rule 15a-6 if they have not been to their web sites and should be prepared to certify this fact in writing to ensure compliance with applicable law.
unquote
For Forex it is US citizens they are ‘trying to protect from themselves’ (how Orwellian) but for Futures and stocks they focus on ‘US Persons’.
what my little South African brain tells me is that U.S. persons (includes e.g. Europeans who have a green card) who are permanently resident abroad can do what they like and open where they want for SEC products.
If as a resident US person you have the misfortune of having found a broker outside the US for these NON FOREX products on the Net, you can’t use them PERIOD.
If your friend, his mother, her sister has heard of these guys in UK who happen to have a good broker and tell you as a resident US person of this then you can. Normally professionals in the field would help and verbally (or over email) advise.
Check Out Jeff Opdyke, he is what I would call an expert on the matter (Jeff Opdyke at Sovereign Investor)
See You Later Guys - You are doing a wonderful piece of great interest to the FX Community and saving a lot of people a lot of Lawyer Fees. Keep it Brewing!
Tokoloshe Man
It was the choice of IamFX. Many Forex brokers chose to continue accepting and servicing US customers with no restrictions, some others (like IamFX) chose not to.
Hehe, good choice.
Lots of US brokers, such as FXCM, seem to cherish hopes of the US CFTC going after offshore brokers in courts of their domicile for breaking US laws without ever being present in the United States, LMAO. I believe that’s the reason for which US brokers don’t yet pursue a legal action against the US CFTC itself for its anti-competitive regulations. With many offshore brokers continuing to accept US customers with no restrictions, this whole situation is plainly grand, while US brokers sure deserve all this for their failure to stand up for their own rights and the rights of their customers.
Well said. Let’s see how fxcm and the like start to act when they realize the cftc is all bark and they wont have the monoply they thought they had created.
I think you are going to see a very sharp change from the major us forex brokers.
Considering how they have acted to date, it will be no more than another bark, just by FXCM and their buddies this time. There’s hardly anything one can do after getting screwed to fix the situation. 
Hello Brave, I have never sent a post to you before or have even said hello to you before, but I have been reading your post since last year and logic and knowledge about brokers is of much interest to me, and what you say about bucketshops,etc. is very true in most cases, so with this in mind and with the effects of the new regulations, out of the list you have for what will take a U.S. customer, what do you believe is top , 2nd and 3rd, if you were limited to these options for use?
MIG Bank and Dukascopy would be my top choices - both are Swiss-based and hold the status of banks there. Finland-based FinFX also looks pretty solid and was recommended by the Forex Megadroid team whose robot I am successfully trading with for almost a year. I’ve also heard good things about FXCBS, Tadawul FX, and FXOpen, and all three of them are large firms with favorable trading conditions and a long history. I’d say those six are on my personal list.
Thanks Brave, I will look into each, also if you would not mind updating you picks as time goes on and the list continues, it would be greatly useful. I look forward to more of your research as time goes on!
RoboForex.com from New Zealand is to be added to our general list of brokers accepting US customers with no leverage restrictions. Below is a transcript of my chat with them:
You are now chatting with William D (Common)
William D: Hello, thank you for contacting RoboForex. How can I help you today?
Jacob: Hello. Do you currently accept US customers?
William D: Yes, of course
Jacob: And the new US CFTC regulations do not affect you in this regard?
William D: Yes, it doesnt affect
Jacob: great, thank you for your information
I agree with Brave, on his recs. Tadawul is very nice for true stp. I also have had a great experience so far with FOREXFS, another stp broker.