Its a direct infringement of the rights of US citizens, their freedom, which is proclaimed as the main value of US nation, isn't it. But we really can't do anything about that.
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Anyone knows why usa residents can't open forex account in hotforex or other brokers?
- Thread starter jetq
- Start date
Outside US Forex firms follow different accounting procedures than what is dictated by regulators here, not to mention other compliance issues that are related to funds, segregation, etc. if you are based in the USA, as suggested above, use Currency Futures on the CME regulated exchange and a reputable firm for execution.
So, what if I want to trade other pairs like EURGBP, GBPJPY, or AUDJPY with a bid/ask spread that's actually suitable for daytrading? What if I want to be like Goldman Sachs and take a longer term currency basket position in the GBP? How do I do that on CME?
CME is no substitute for forex trading. It doesn't offer the pairs I want with reasonable spreads. And many other pairs it doesn't have.
CME knows it can't force commercials out of the Interbank market which is much more liquid, so they go after retail forex traders like myself to restrict us instead. Guess it makes CME feel big and powerful. CFTC is happy to help...revolving door and all that.
In 2009, regulators began a 2-pronged attack against the Forex industry. First, NFA inserted language in Dodd-Frank to ban US residents from trading with overseas Forex brokers. I had opened an account with FXCM UK in 2008 because the spreads were better. Thanks to Dodd-Frank, I was forced to close the account.
Next they went after domestic Forex brokers here in the US, mostly by raising broker capital/liquidity requirements way above what would actually be needed by retail traders. I mean you never know when Bill Gates might want to call a random retail Forex broker and put a $1,000,000,000 trade on the Aussie. Yeah, got to be ready for that!
In 2009, there were probably two dozen Forex brokers in the USA. Now there are only 2 remaining -- Forex.com (Gain Capital Holdings) and Oanda. Of the two, Gain Capital is the largest, with total assets of $1.4B. The company's stock trades on the NYSE (GCAP).
Sometime over the next couple years, expect the CFTC to find some "irregularity" in their business practices. Any excuse will suffice to get them both booted out of the country.
...and the CFTC's task to destroy the retail Forex industry in the United States will finally be complete...revolving door here I come. I'm already a Gov't SES with a gold plated pension, but hey that's just not enough. GIMME ONE OF THEM 7-FIGURE WALL STREET EXECUTIVE PAY CHECKS...YEAH BABY!!!
Thus concludes today's civics lesson.
"Anyone knows why usa residents can't open forex account in hotforex or other brokers?"
Dodd-Frank regulations which was used by the CFTC/NFA to pass a rule that all brokers who offer any Forex broker services to USA residents must be registered with CFTC/NFA. Since majority of the brokers who are located in countries with sound or even better financial regulatory bodies are already heavily regulated, they are not interested in spending double the time & resources let alone the paper work to register with CFTC/NFA so they are not allowed to take on USA residents as clients. And those brokers gladly complied because they are reputable brokers so they have no problem getting clients from elsewhere in the world besides USA.
The only people who lost out in this over-application of Dodd-Frank regulations? USA traders who are either stuck with US brokers with no alternatives or risk getting scammed by going to offshore brokers who are inadequately regulated or not regulated at all.
Dodd-Frank regulations which was used by the CFTC/NFA to pass a rule that all brokers who offer any Forex broker services to USA residents must be registered with CFTC/NFA. Since majority of the brokers who are located in countries with sound or even better financial regulatory bodies are already heavily regulated, they are not interested in spending double the time & resources let alone the paper work to register with CFTC/NFA so they are not allowed to take on USA residents as clients. And those brokers gladly complied because they are reputable brokers so they have no problem getting clients from elsewhere in the world besides USA.
The only people who lost out in this over-application of Dodd-Frank regulations? USA traders who are either stuck with US brokers with no alternatives or risk getting scammed by going to offshore brokers who are inadequately regulated or not regulated at all.
JSOP, Whoa! We must have been riding the same brain wave. Cheers!
"Anyone knows why usa residents can't open forex account in hotforex or other brokers?"
Dodd-Frank regulations which was used by the CFTC/NFA to pass a rule that all brokers who offer any Forex broker services to USA residents must be registered with CFTC/NFA. Since majority of the brokers who are located in countries with sound or even better financial regulatory bodies are already heavily regulated, they are not interested in spending double the time & resources let alone the paper work to register with CFTC/NFA so they are not allowed to take on USA residents as clients. And those brokers gladly complied because they are reputable brokers so they have no problem getting clients from elsewhere in the world besides USA.
The only people who lost out in this over-application of Dodd-Frank regulations? USA traders who are either stuck with US brokers with no alternatives or risk getting scammed by going to offshore brokers who are inadequately regulated or not regulated at all.
So what's the problem with those two? Assuming they follow NFA/SEC guidelines, have access to liquidity offer reasonable spreads? What explains the need to search for something else?
Everyone offering stock and commodity brokerage service in the US seems to be able to handle this requirement without a problem, don't see why forex providers should get a free pass."Anyone knows why usa residents can't open forex account in hotforex or other brokers?"
Dodd-Frank regulations which was used by the CFTC/NFA to pass a rule that all brokers who offer any Forex broker services to USA residents must be registered with CFTC/NFA. Since majority of the brokers who are located in countries with sound or even better financial regulatory bodies are already heavily regulated, they are not interested in spending double the time & resources let alone the paper work to register with CFTC/NFA so they are not allowed to take on USA residents as clients. And those brokers gladly complied because they are reputable brokers so they have no problem getting clients from elsewhere in the world besides USA.
The only people who lost out in this over-application of Dodd-Frank regulations? USA traders who are either stuck with US brokers with no alternatives or risk getting scammed by going to offshore brokers who are inadequately regulated or not regulated at all.
Everyone offering stock and commodity brokerage service in the US seems to be able to handle this requirement without a problem, don't see why forex providers should get a free pass.
Forex itself is a little different from stocks and commodities. The cost structure facing Forex brokers is thus a little different from stock and commodity brokers.
Everyone offering stock and commodity brokerage service in the US seems to be able to handle this requirement without a problem, don't see why forex providers should get a free pass.
It's the futures brokers that are getting the "free pass". Unlike Forex brokers, they don't have any significant capital requirements since the CFTC considers them pass thru to one of their nostalgic 90's era futures exchanges.
This post doesn't make any sense to me, would be able to restate it? Are you saying that clearing has different capital requirements than brokering and you think this is unfair? You think exchanges are somehow obsolete???It's the futures brokers that are getting the "free pass". Unlike Forex brokers, they don't have any significant capital requirements since the CFTC considers them pass thru to one of their nostalgic 90's era futures exchanges.