Going offshore to escape the CFTC

Is it no said that thanks to the idiots that comprise the U.S. regulatory system traders are either forced to accept the nazi-like rules or move away?

No, I donā€™t plan on doing anything illegal, I just like to put as much distance as possible between me and corrupt cops, especially Mexican cops. I donā€™t like them. Too many horror stories about them.

There is not enough geographical distance on the planet, that is capable of protecting you from ā€˜corrupt copsā€™. Corruption is everywhere. The trick is to know how to ID neighborhoods where the local society insulates against such corruption. (And btw, this does not mean just moving to an isolated community of expats.) It is essential to join the local society, and culture, by making friends with the locals. Safe living is possible even in places, like Mexico. I know because I have done this, for over a decade, in several countries - including living just blocks from the much-feared Tijuana border, for the last 7 years. [U]My primary requirement is that the countryā€™s economy be in good shape.[/U] Then, I go down the list of the rest of my requirements. Overall, my life abroad has benefited me on all levels - mentally, physically [U]and[/U] fiscally. So, Iā€™d advise you to wait until you can think of a future life abroad without fear - and then go for it with gusto! My life is so much richer for having done thisā€¦

Hereā€™s an article from the UK Telegraph on the Tobin Tax being implemented in the EU. Evidently it has already been launched in France and Italy, with the remaining countries including Germany to follow next year. So far, the results have been predictably less than stellar.

Tobin Tax is madness for Europe, and economic war against Britain - Telegraph

The point here is Tobin inflicts a .01% tax on derivatives trades. I canā€™t imagine European FOREX traders will be pleased. Itā€™s reasonable to believe that many brokers will simply relocate. And perhaps a few of them will consider offshore havens more friendly to US residents.

Anyway, something to watch for in the coming monthsā€¦

I think so to. The Tobin Tax is another communist idea which is designed to fail. It is sad for EU based forex traders. I am not sure why a broker wold even want to be in the EU.

A recent newcomer, Forexbrokerinc.com, seems to be offering a really good deal until April 19, 4 days from the date of this comment. They will give $75 of real money to people opening new accounts to trade with, with no initial deposit required on the part of the trader. Their Terms of Agreement seem to say that only trading profits can be withdrawn after the balance goes over $100. I just opened an account with them and will ask for the money in a day or two after they accept my documents for ID and address.

They donā€™t seem to be afraid at all of the Dodd-Frank people. They are based in Malta, Europe.

Hi, feel free to share your experience with them as you start to trade there.

Hello compounder,

As you investigate [B]ForexBrokerInc,[/B] and gain some experience as a client with them, I hope that you will keep us informed of what you find out.

Before I added ForexBrokerInc to Group 1 in our List, I read their entire website, looking for certain key pieces of information. I failed to find some things I was looking for.

After your post in this thread yesterday, I re-read that website, looking for that same information, and still couldnā€™t find it.

[U]Hereā€™s what I was trying to find:[/U]

ā€¢ What government agency regulates this broker?

ā€¢ Have there been any legal actions taken against this broker by the regulator in the past 3 years?

ā€¢ Are customer funds held in segregated and insured accounts, or are they commingled with the brokerā€™s own funds?

ā€¢ In the case of the ECN Micro Account offered by this broker, both a spread and a commission are charged. Where can we see a schedule of these spreads? How much is the commission charge on each trade, and how is it assessed?

ā€¢ The website seems to imply that the ECN Micro Account is the only account offered in which trades [B]smaller[/B] than Standard Lot Size can be made. Is this correct?

Regarding forex regulation in Malta (in general), I found this ā€” Forex - Chetcuti Cauchi, Malta This information may be accurate, but it is presented here by a law firm which specializes (apparently) in financial matters in Malta; this information is not from the regulator in Malta. When you chat with the nice people at ForexBrokerInc, I think you should ask lots of questions about regulation.

Finally, if youā€™re up to date on the financial problems in Cyprus, you might ask this broker to explain what happened in Cyprus, and why you should not be concerned about the same thing happening in Malta.

Please let us know what you find out.

p.s. - back in November, another poster from Texas (screen-name jcvmw) brought up the subject of ForexBrokerInc.
Hereā€™s a link to his post. Do you two know each other?

Within about 2 or 3 hours after Forexbrokerinc accepted my ID and address documents they did give me a real $75 to play with requiring no deposit on my part. Their main website did not initially accept my documents for some reason, so I had to email scanned PDF copies to their <[email protected]> address, at the advice of someone in their chat window. I have made about 3 or 4 trades using their Gold ECN 500:1 leverage account, which does have a small commission in addition to their small, bid ask spreads extending out to .01 volumes. A person might conclude that the commission, though, pretty much negates any advantage of the very tight spreads for their Gold ECN accounts. I donā€™t know yet what the spreads are in their other 2 types of accounts, which have 200:1 leverage, but they are probably good, tight spreads according to their website. I believe those other 2 accounts can trade only .1 volume or larger, and if I am wrong about that I will try to remember to post that information later. Their speed of trade execution seems fast enough, basically. There are no time delaying requotes, a major no-no for me. In their Terms and Conditions I saw no mention of international regulators, which may possibly be a good thing since Obamaā€™s Dodd-Frank agents will not be able to use them to put pressure on this broker. It is stated that clientsā€™ funds are kept in a segregated account safe from potential creditors. As long as a broker is honest and protects his clientsā€™ rights, maybe he doesnā€™t need regulators. I did not ask anyone at this broker about the risk of a future Cyprus style banking crises coming to Malta, the home of Forexbrokerinc, because on their website they say they use some of the really big, international banks for their operations.

So overall I would say this is a good, safe broker. Their chat window seems to be available and online longer during the day than most other brokers, a big plus. If a person can withdraw owed money with no problems, I think that is one of the really important things. With the brokers I have used in the past, about 6 or 7, I have never had a problem withdrawing money.

On their Gold ECN account the Eur/Usd spread is for example, 1.31718 and 1.31728, for Gbp/Usd 1.53509 and 1.53527, for Usd/Jpy 98.120 and 98.130, for Eur/Jpy 129.280 and 129.300, and for Aud/Usd 1.03458 and 1.03472. The commission adds at least another .01 to the spread I believe. Next time I will try to remember to write down the exact commission amount. These spreads seem to be able to be viewed only on the trading station, their Meta4. The commission subtracted from each open trade is shown immediately below the profit/loss number on the extreme bottom right. It looks like the commission is charged according to the volume size of the trade.

I do not know jcvmw, Clint.

I have spoken to their live chat and honestly did not like their behavior. They discriminate based on where their traders are from and the person I spoke with was very unprofessional. I hope you have a better experience than I did with them. From what I have experienced I would stay far away from them, but of course my case could be an exception.

Thanks for the detailed report, compounder.

In the listing for ForexBrokerInc. (in the Offshore Broker List at the beginning of this thread), I will add a reference to your post; it will be helpful for anyone considering this broker.

Thanks for this input, Bear. I will add a reference to your post (#1961) in our ForexBrokerInc listing.

Sure thing. I think this is a very important thread at least to the more serious forex traders in our community.

Not sure if it has been posted already, but I spoke to ForexCT a few minutes ago, and they do not accept US traders anymore. XoomForex (Cyprus) also doesnā€™t have a working website. On the Lucror FX (New Zealand) client application page, the US isnā€™t even listed as a country of residence. The Renesource Capital (Latvia) web page is not accessible. On the OM Financial (New Zealand) client application form it states " I am not a U.S. citizen or U.S. Green-card holder. In keeping with U.S. tax laws and foreign tax obligations, I am aware it is illegal for a U.S. citizen, permanent resident or Green-card holder to transact in U.S. equities or U.S. Interest Rate products through the facilities offered by OMFinancialLtd.". The F/B Capital Markets (British Virgin Islands) website is unreachable, so another 6 bite the dust.

My experience with them has been quite good. I opened an account in January. I did have an issue with a matching deposit but I called a NY number that was provided and spoke to my account manager and he resolved it within the hour. Overall, I see no difference much difference from any other broker I have used.

I will say the spreads on their e-mini products makes them untradeable - I do not see why they even offer them.

Spread on E$ - usually between 1.7 - 2.0
Sread on EJ - usually between 2.3 - 2.9
Sread on GBP$ - usually between 1.8 - 2.5

Cheers!

Those are the only pairs I look at enough to get a good average.

[quote=ā€œpetg6,post:2122,topic:35612ā€]
[/QUOTE]

Hello, petg6

Thanks for the information which you have gathered.

Hereā€™s what Iā€™ve been able to determine:

There are two ForexCT companies (brokers) with almost identical names: Forex Capital Trading Ltd (ForexCT Ltd), an unregulated Vanuatu company; and Forex Capital Trading Pty Ltd (ForexCT Pty Ltd), a regulated Australian company. The Vanuatu company is the parent, and the Australian company is the subsidiary. The ForexCT website is the website of the Vanuatu parent company.

Only Australian residents can be clients of ForexCT Pty Ltd (the regulated Australian company). All others are clients of the Vanuatu parent company.

Apparently, any non-Australian (including Americans) can open an account with ForexCT Ltd (the unregulated Vanuatu broker), and I did just that, a few minutes ago. I opened a live MT4 account, furnishing only my name, email address, password, country, and phone number.

The sign-up page said that I would be receiving an email confirming my log-in info. However, it was about 4:30pm New York time (7:30am Saturday morning in Vanuatu) when I ā€œopenedā€ this account, so Iā€™ll probably have to wait until Monday for that email.

Our listing of ForexCT (Australia) in Group 1 of the Offshore Broker List (indicating that they will accept new U.S. clients) is obviously incorrect.

Clearly, we need to do one of two things: either (1) change our listing in Group 1 to show ForexCT Ltd as an unregulated Vanuatu broker, or (2) remove ForexCT from Group 1 and add them to Group 2 (brokers who will not accept U.S. clients).

Any opinions on this choice?

I havenā€™t had time to look into these, but I will give it a shot over the weekend.

You did such a good job of finding these 6, how about finding 6 new brokers to replace them? :13:

Thanks for this input, enochbenjamin. I will add a reference to your post (#1966) in our ForexBrokerInc listing.

Hahaha. Thanks for the reply Clint. Great stuff by you as always. You are a gentleman and a scholar.

I think moving Forex CT to the option #2 rejection pile would be the move to make.

I wish I could find 6 new brokers for you to add to the Option #1 list.

I sent a message to Forex FS (Australia) today asking them how itā€™s possible they are the only remaining broker in Australia still accepting US clients, so I eagerly await their reply, but I think its only a matter of time before they cave too, if they havenā€™t already.

My gut tells me that when the smoke finally clears and the CFTC canā€™t go after anyone else, FinFX, FX Choice, and maybe 5 other brokers max will still be the last firms standing for US clients. I use FinFX and FX Choice and Iā€™m very happy with them, but Iā€™m heading towards setting up an offshore company and bank account in the very near future.

Thanks for the update.

ForexCT Pty Ltd (Australia) has been moved from Group 1 to Group 2 on our List.

You are correct. XoomForex has disappeared from the internet. According to XoomForex reviews, this broker is out of business. They will be [B]deleted[/B] from our List [B](not moved to Group 2).[/B]

I havenā€™t been able to determine (yet) whether Lucror will deal with U.S. residents, so I wonā€™t make any changes to their listing, until I get more info.

Hereā€™s their new website ā€” www.renesource.eu/ ā€” I will update their listing in Group 1.

And HERE is some recent news regarding this broker.

Finally, Renesource Capital has to have the most annoying Client Quesionnaire ever devised.

Correct. This broker will be moved from Group 1 to Group 2 of our List.

Agreed. This broker has disappeared and will be [B]deleted[/B] from our List [B](not moved to Group 2).[/B]

In the next day or two, I will post these changes to the List. Edit ā€” the List has been updated.