Proposed NFA Capital Requirement - page 13
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The NFA rule proposal says nothing about a firm's ratio of capital to excess net capital. It is very simple, they want firms to have over $5 million due to the higher risk associated with being poorly capitalized (see the CFG case). It's that simple. Everything else you have posted is irrelevant.
Its interesting to note...
Thanks for all this links.
FXCM regulatory history, is your money really safe with them ?
Here's a couple of snipets I stumbled upon whilst looking up the regulatory history of the best capitalised forex firms.
In November 2005, FXCM was fined $110,000 to settle a complaint brought against them by the NFA claiming violation of Rule C.R.2-36(b)(1) which is defined as "Cheat, defraud, deceive forex customers". FCM in no way admitted or denied the charge, and made the settlement with the NFA. You can find the details here :
BASIC Case Summary
In January 2006, the NFA did a follow up audit. The follow on audit revealled that FXCM had not abided by the agreement which had the resolved the previous regulatory action. Thus the NFA initiated another complaint against FXCM, which is as yet unresolved (I believe) for violation of Rule C.R.2-36(b)(1) which is defined as "Cheat, defraud, deceive forex customers"
The audit also identified potential failings of "FXCM's anti-money laundering program (AML) "as evidenced by the high number of accounts FXCM opened for Nigerian nationals, without identifying those accounts as high risk for potential money laundering."
You can find the details here :
BASIC Case Summary
The particular concern about Forex companies opening accounts for Nigerian nationals is that Nigeria is the origin of a number of internet scams commonly called the "Nigerian 419 Scam" If you dont know what the Nigerian 419 scam check out the the following very entertainment link :
Ebola Monkey Man: Nigerian 419 Scam
I personally wouldnt go near any Forex Dealer Merchant that had been subject to regulatory action, let alone bought to book for violation of Rule C.R.2-36(b)(1). I've done a check and found the following 3 firms have not been subject of any regulatory action, and are the best capitalised.
GLOBAL FUTURES & FOREX LTD (Forex Trading: Online Currency Trading from Global Forex Trading)
NFA Registration and History
OANDA ( http://fxtrade.oanda.com/ )
NFA Registration and History
FX SOLUTIONS LLC (FX Solutions - Simplified Forex Trading with Premier Forex Trading System)
NFA Registration and History
COMPANY | Net capital| Required | Excess | Multiple
GFT | 49,664,118 | 6,904,864 | 42,759,254 | 7.19x
OANDA | 49,222,317 | 9,172,410 | 40,049,907 | 5.37
FX Solutions | 17,295,130 | 2,064,386 | 15,230,744 | 8.38
Does anyone else knows of any FDM's with no regulatory problems and are well capitalised ?
disclaimer : I in no way qualified to say that fxcm is Cheating, defrauding, or deceiving forex customers, or that they ever have. However, our regulatory body the NFA have made complaints that they have.
FXCM Response
Here's a couple of snipets I stumbled upon whilst looking up the regulatory history of the best capitalised forex firms.
In November 2005, FXCM was fined $110,000 to settle a complaint brought against them by the NFA claiming violation of Rule C.R.2-36(b)(1) which is defined as "Cheat, defraud, deceive forex customers". FCM in no way admitted or denied the charge, and made the settlement with the NFA. You can find the details here :
BASIC Case Summary
In January 2006, the NFA did a follow up audit. The follow on audit revealled that FXCM had not abided by the agreement which had the resolved the previous regulatory action. Thus the NFA initiated another complaint against FXCM, which is as yet unresolved (I believe) for violation of Rule C.R.2-36(b)(1) which is defined as "Cheat, defraud, deceive forex customers"
The audit also identified potential failings of "FXCM's anti-money laundering program (AML) "as evidenced by the high number of accounts FXCM opened for Nigerian nationals, without identifying those accounts as high risk for potential money laundering."
You can find the details here :
BASIC Case Summary
The particular concern about Forex companies opening accounts for Nigerian nationals is that Nigeria is the origin of a number of internet scams commonly called the "Nigerian 419 Scam" If you dont know what the Nigerian 419 scam check out the the following very entertainment link :
Ebola Monkey Man: Nigerian 419 Scam
I personally wouldnt go near any Forex Dealer Merchant that had been subject to regulatory action, let alone bought to book for violation of Rule C.R.2-36(b)(1). I've done a check and found the following 3 firms have not been subject of any regulatory action, and are the best capitalised.
GLOBAL FUTURES & FOREX LTD (Forex Trading: Online Currency Trading from Global Forex Trading)
NFA Registration and History
OANDA ( http://fxtrade.oanda.com/ )
NFA Registration and History
FX SOLUTIONS LLC (FX Solutions - Simplified Forex Trading with Premier Forex Trading System)
NFA Registration and History
COMPANY | Net capital| Required | Excess | Multiple
GFT | 49,664,118 | 6,904,864 | 42,759,254 | 7.19x
OANDA | 49,222,317 | 9,172,410 | 40,049,907 | 5.37
FX Solutions | 17,295,130 | 2,064,386 | 15,230,744 | 8.38
Does anyone else knows of any FDM's with no regulatory problems and are well capitalised ?
disclaimer : I in no way qualified to say that fxcm is Cheating, defrauding, or deceiving forex customers, or that they ever have. However, our regulatory body the NFA have made complaints that they have.My name is David Waring and I am the Managing Director in charge of Business Development here at FXCM. I came across this post and would like to address the community with a response to make sure that both sides of the story are properly represented.
On December 8th, the National Futures Association ("NFA") filed a complaint against FXCM. The NFA complaint alleges that certain promotional material used by FXCM and some of its Introducing Brokers was deficient. The NFA also cited FXCM for a single alleged deficiency in its anti-money laundering ("AML") compliance program.
FXCM maintains comprehensive compliance and AML programs and has long since addressed all of the issues identified by the NFA in the complaint. We believe our firm has more staff and resources dedicated to compliance than all other Forex Dealer Members and most other Futures Commission Merchants. We have terminated hundreds of Introducing Brokers and turned away millions of dollars of potential business due to compliance related concerns. In light of our significant investment in compliance infrastructure and training, FXCM is troubled by the NFA's decision to bring this current complaint. Accordingly, FXCM will be exploring all options presently available to it, including litigation, to bring this matter to conclusion in a manner that gives proper acknowledgment to FXCM's integrity and the strength of our compliance program.
The NFA complaint comes more than six months after the conclusion of a routine NFA on-site examination of FXCM, which itself lasted almost six months. During this examination, FXCM provided NFA with unrestricted access to thousands of documents, including complete records of all promotional material used by FXCM. These records of promotional material included access to websites and copies of all forms of advertising used by the firm such as web banner ads, web click ads, e-mails and print media.
The NFA complaint identifies five instances where it alleges FXCM used deficient and misleading promotional material. Two of the examples cited by NFA are as follows:
1. "Whichever web site you use - FXCM or FXCM TR - you will be able to experience the same excellent order execution, price certainty and 24-hour support."
2. "Benefits of Forex Trading . . . Leverage up to 200 to 1" and "Benefits of Foreign Exchange Trading . . . Leverage up to 100 to 1."
FXCM believes the statement in Example 1 above is true and not misleading. The statement suggests that regardless of which website a client chooses to use, FXCM's award winning trading platform will be the principal client interface providing pricing. FXCM also believes that the statements contained in Example 2 above are not deficient or misleading. The statements in Example 2 with respect to leverage appeared in an FXCM Trading Seminar PowerPoint presentation which contained a full page risk disclosure slide at the outset dedicated to the issue of leverage risk. The risk disclosure stated in part: "Leveraged foreign exchange and options trading carries a significant level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you." FXCM believes that the NFA's published interpretive guidance on leverage risk disclosure does not require repeated risk disclosures each and every time the availability of leverage as an account feature is mentioned in a single piece of promotional material.
The NFA complaint also alleges marketing deficiencies on the websites of a small number of Introducing Brokers. As part of its compliance program, FXCM regularly monitors the websites and promotional material used by FXCM's hundreds of Introducing Brokers. Each week FXCM's compliance staff reviews hundreds of webpages and, while the process is not infallible, various types of deficiencies are routinely identified and then communicated to the Introducing Broker so that they can be corrected promptly. Several of the examples of alleged promotional material deficiencies identified by the NFA in its complaint had already been identified by FXCM's compliance staff through routine surveillance and were either in the process of being remedied or had been remedied prior to the conclusion of NFA's on-site examination.
The NFA complaint also alleges that FXCM failed to establish and implement an adequate AML program. This allegation is especially unfortunate as the fact is that FXCM maintains a vigorous and comprehensive AML program. Under a provision of the USA Patriot Act and applicable federal regulations, FXCM submits its AML program to an independent, outside audit each year and has never been cited for any deficiencies in its AML program.
The allegation contained in the NFA complaint with respect to the FXCM's AML program centers on the NFA's claim that FXCM failed to identify a small number of accounts from Nigeria as "high risk accounts." During the NFA's on-site examination of FXCM, we explained to the NFA managers that because FXCM already had in place a comprehensive, individual account review program, FXCM did not believe that its Nigerian accounts needed to be subject to additional due diligence as discussed in the Interpretive Notice to NFA Compliance Rule 2-9. We explained further that the Interpretive Notice to NFA Compliance Rule 2-9 clearly states that with respect to "high-risk" accounts the decision as to what "if any, additional monitoring of account activity is appropriate" is left up to the discretion of the individual firm. At no time has the NFA suggested or alleged that any money laundering took place at FXCM. The NFA has also not suggested or alleged that FXCM was required to perform any additional due diligence with respect to activity in these accounts. Rather, the NFA's sole allegation with respect to AML appears to be with respect to the how these accounts were designated or "coded" internally. We do not believe that a dispute over this single issue amounts to a failure by FXCM to "establish and implement" an adequate AML program.
FXCM is committed to being the forex industry leader in compliance and adheres to the highest standards in carrying out all of its regulatory obligations. Please do not hesitate to contact us at compliance@fxcm.com if you have any further questions or concerns about this matter.
Sincerely,
David Waring
Managing Director
FX Business Development
Forex Capital Markets LLC
Email: dwaring@fxcm.com
FXCM is a SCAM a BUCKETSHOP and a MARKET MAKING STEALING THIEF!!!
Drew Niv is a criminal and should be locked up!!And so should you for working for him!!
DO NOT EVER EVER USE FXCM THEY WILL MAKE SURE THEY KEEP YOUR MONEY!!
I just came across this thread and now I'm kind of apprehensive with staying with FXDD because of their reported holdings. I've had no trouble with them for the past few years but all of this has me 'thinking' now...
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