Proposed NFA Capital Requirement - page 38
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How anybody could critisize the regulation of Forex...is beyond me. Forex is a Circus just now and its only hope is regulation.
Futures in the USA could have become as Forex has...But Thanks to the NFA. The leveraged Futures industry and its instruments are regulated and the Circus was not allowed to proliferate.
Thank you NFA
Thank you CFTC
We just cannot self-regulate ourselves, we need you and we pay taxes for you, here in the USA.
ES
P.S. However, It is my opinion that if the Forex Global players cannot unite into ONE regulated price feed...that the benefit of regulation cannot ever be, what it can be...Arbitrage keeps the ECN and pricing pools in synchronization. Forex shouldn't be a centralized market, that is worse than having a global centralized stock market and even more misguided. The banking ring networks function just fine thank you. Your animosity toward retail brokers is well founded, but your declaration of war is misplaced.
In terms of regulation, there should be higher requirements than affording an MT4 license. But the NFA is crazy/insane. They are a business and adding more fees increases revenue. Now they are becoming an *enforced* monopoly as well. Joy. I'm looking into Panama brokers (privacy by law - still looking into specific companies), Swiss brokers (eh... ), etc.
Reading through that document, I get the distinct impression that it completely destroys MT4. The way that MT4 dealer desks work completely violates that bill. They wouldn't be able to fill at the price you request, they would be required to give you slippage. The only forex software that I personally know of that would allow you to legally trade would be the horrible chart free program from MBTrading. Maybe the EFX or new version has charts?
I'm wondering if MT4 could be modified enough to make it legal. I'm working with their Server API now, and it just ... I don't know if it can work. At the very least, most EA code would break because of the AcceptSlip parameters. This of course, assuming that brokers follow the new regulations.
Crazy!!
‘‘SEC. 4b. CONTRACTS DESIGNED TO DEFRAUD OR MISLEAD.
‘‘(a) UNLAWFUL ACTIONS.—It shall be unlawful—
‘‘(1) for any person, in or in connection with any order to
make, or the making of, any contract of sale of any commodity
in interstate commerce or for future delivery that is made, or to
be made, on or subject to the rules of a designated contract
market, for or on behalf of any other person; or
‘‘(2) for any person, in or in connection with any order to
make, or the making of, any contract of sale of any commodity
for future delivery, or other agreement, contract, or transaction
subject to paragraphs (1) and (2) of section 5a(g), that is made,
or to be made, for or on behalf of, or with, any other person,
other than on or subject to the rules of a designated contract
market—
‘‘(A) to cheat or defraud or attempt to cheat or defraud
the other person;
‘‘(B) willfully to make or cause to be made to the other
person any false report or statement or willfully to enter or
cause to be entered for the other person any false record;
‘‘(C) willfully to deceive or attempt to deceive the other
person by any means whatsoever in regard to any order or
contract or the disposition or execution of any order or con-
tract, or in regard to any act of agency performed, with re-
spect to any order or contract for or, in the case of para-
graph (2), with the other person; or
‘‘(D)(i) to bucket an order if the order is either rep-
resented by the person as an order to be executed, or is re-
quired to be executed, on or subject to the rules of a des-
ignated contract market; or
‘‘(ii) to fill an order by offset against the order or orders
of any other person, or willfully and knowingly and with-
out the prior consent of the other person to become the
buyer in respect to any selling order of the other person, or
become the seller in respect to any buying order of the other
person, if the order is either represented by the person as
an order to be executed, or is required to be executed, on or
subject to the rules of a designated contract market unless
the order is executed in accordance with the rules of the
designated contract market.
It *appears* that (D)(ii) turns anyone who trades the *net* trades of the clients into a criminal. An outright criminal for maintaining a *net* position. (*@#&$(*@#&$@(*#&*(
Sooo... Panama, Switzerland... where else?
Edit: I'm still trying to find out if the individual traders are allowed to trade in markets outside of the US. i.e. an American opening an account with MiG or NorthFinance.
"Bush Will Lose"
According to the Washington Post Bush will still veto the farm bill. However, the veto will not be sustained in Congress.
washingtonpost.com
Senate Passes Farm Bill, But Bush Still Plans Veto
President Bush will now follow the lead of the late Dwight Eisenhower by vetoing a comprehensive farm bill.
Bush, though, is no Eisenhower.
On Thursday, the Senate, by a comfortably veto-proof margin of 81 to 15, approved a farm bill that now faces a resistant White House. Bush says he will veto the five-year package, much as Eisenhower nixed a big farm bill in April 1956.
Eisenhower won his showdown, the last time a president vetoed a major, standalone farm bill. Bush, however, will lose. The House and Senate now have both approved the farm bill by more than the two-thirds vote needed to override a veto.
"Mr. President, you and your people have been at the table for more than a year," Sen. Larry Craig (R-Idaho) declared. "It's time you recognize the value of this project."
Craig was one of 35 Republican senators to abandon Bush on Thursday and support the farm bill. On Wednesday, 91 GOP House members voted for the bill, boosting the House's approval to a veto-proof margin of 318 to 106.
Sen. John McCain (Ariz.), the Republicans' presumptive presidential candidate, missed the vote but said he opposes the bill. Democratic Sens. Hillary Clinton (N.Y.) and Barack Obama (Ill.) both support the bill, but they likewise missed the vote.
I'm not sure what "owns FXDD's IP address" actually means in reality, but it does seem a tenuous sort of relationship! Appreciate the links btw - I had a quick look at Tradition Groups figures and there's no denying, they do appear quite profitable. Which makes FXDD's initial stance regarding NFA membership all the more suspect - it suggests that they do not have recourse to any of the group funds... PS. Being a non-profit IB, does this also mean you are a "paid-up" user of the Metatrader broker s/w (if it's not too intrusive a query)?
IB's don't pay MT4 licenses, and neither do white labels. (White Labels are glorified IB operating under their own name.)
The technical and legal connection between FXDD and Tradition Group is very solid, and it is very well structured for tax and liability purposes. There is a lot of clout behind FXDD, and they are by no means at risk of bankruptcy. The question was: do they have capital? The answer is yes. They sponsor the trading competition too. FXDD is no small player, they used to have IBFX as a whitelabel. (IBFX used FXDD to execute trades.) Later IBFX switched to FXLQ, and now they need to pay their own license fees.
A community effort to sign up under an IB costs the traders nothing, the proceeds come out of the broker's spread. The broker's spread is now going away with the new laws. So will most leverage and small lot sizes. I'm writing senators who recently switched sides supporting the bill but obviously haven't read the 700+ page monstrosity.
Aleccoh and FXLQ supposedly "had capital" but we could not get to it...because of the "liability purposes/arragements"...well the NFA will put a stop to that!
ES
IB's don't pay MT4 licenses, and neither do white labels. (White Labels are glorified IB operating under their own name.)
The technical and legal connection between FXDD and Tradition Group is very solid, and it is very well structured for tax and liability purposes. There is a lot of clout behind FXDD, and they are by no means at risk of bankruptcy. The question was: do they have capital? The answer is yes. They sponsor the trading competition too. FXDD is no small player, they used to have IBFX as a whitelabel. (IBFX used FXDD to execute trades.) Later IBFX switched to FXLQ, and now they need to pay their own license fees.
A community effort to sign up under an IB costs the traders nothing, the proceeds come out of the broker's spread. The broker's spread is now going away with the new laws. So will most leverage and small lot sizes. I'm writing senators who recently switched sides supporting the bill but obviously haven't read the 700+ page monstrosity.I'm getting the general impression that since this act includes the trader, the broker, the associated persons AND their counterparties, that this act essentially establishes all dominion over anyone in the US from doing business with anyone who *isn't* registered in the US. In other words, the US market can only trade with the US market, or firms outside the US market who have joined the US market regulations.
Did I mention they are crazy? Crazy.This isn't strange with US and others countries law and sometimes is very good and sometimes not.
One external example is the EU regulations about personal data. A country outside the EU needs to be in agreement with EU regulations to establish a legal e-business, data transfer, provide services, etc.
In my country personal data protection is a lot better than in US, however US companies like Goog or YH does not accept to operate under local law and has been take to court many times.
Aleccoh and FXLQ supposedly "had capital" but we could not get to it...because of the "liability purposes/arragements"...well the NFA will put a stop to that! ES
If you want to stop companies from lying, you should read "Power vs Force".