How exactly does makeing a bill like this work its it basiclly "benefits to farms benefits to food stamp benefits to emergency food aid, Ohhh and by the way U.S. forex dealers must have minimum adjusted net capital of $20 million in addition to requirements that all introducing brokers be registered with the CFTC. kk thx bye." did they have some empty space at the bottom of a farm bill to just slap in the forex part?
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Proposed NFA Capital Requirement
- Thread starter forexsavior
- Start date
Quote from nexx:
How exactly does makeing a bill like this work its it basiclly "benefits to farms benefits to food stamp benefits to emergency food aid, Ohhh and by the way U.S. forex dealers must have minimum adjusted net capital of $20 million in addition to requirements that all introducing brokers be registered with the CFTC. kk thx bye." did they have some empty space at the bottom of a farm bill to just slap in the forex part?
YUP, that's exactly what they did!
Halloween: The Day the Dead Pool Rises from the Grave
Cue up the Michael Myers Halloween Themeâ¦
I have just finished reading the Farm Bill language and it is clear that the Congress is not giving the industry much time to adapt to the incredible changes they are forcing upon retail forex dealers and introducing brokers.
The full language is now available at the House of Representatives website:
http://agriculture.house.gov/inside/FarmBill.html
Title XIII (page 548) is the part of the bill that references the forex industry. Note the following language as it pertains to adjusted net capital requirements for forex dealers:
http://agriculture.house.gov/inside/Legislation/110/FB/Conf/CRlang.pdf
Assuming the bill passes by the end of June, that would give U.S. retail forex dealers until Halloween to increase their capital to $10 million. Then they would have until February 2009 to increase it to $15 million and then June of 2009 to reach the full $20 million. Halloween would also be the registration date for Introducing Brokers.
The bill also creates a separate registration category for Forex Dealers and gives the CFTC tremendous leeway in crafting rules governing this new financial services category. There is no telling what the CFTC might come up with (tough new Margin Requirements? Customer Funds Segregation? New Dealing Practice Rules?)
All in all the industry is in for a massive overhaul in the next 12 months. There are sure to be a lot of tricks and treats ahead. Stay Tuned.
Cue up the Michael Myers Halloween Themeâ¦
I have just finished reading the Farm Bill language and it is clear that the Congress is not giving the industry much time to adapt to the incredible changes they are forcing upon retail forex dealers and introducing brokers.
The full language is now available at the House of Representatives website:
http://agriculture.house.gov/inside/FarmBill.html
Title XIII (page 548) is the part of the bill that references the forex industry. Note the following language as it pertains to adjusted net capital requirements for forex dealers:
http://agriculture.house.gov/inside/Legislation/110/FB/Conf/CRlang.pdf
â(ii) The dollar amount that applies for purposes of this clause is-
â(I) $10,000,000, beginning 120 days after the date of the enactment of this clause;
â(II) $15,000,000, beginning 240 days after such date of enactment; and
â(III) $20,000,000, beginning 360 days after such date of enactment.
Assuming the bill passes by the end of June, that would give U.S. retail forex dealers until Halloween to increase their capital to $10 million. Then they would have until February 2009 to increase it to $15 million and then June of 2009 to reach the full $20 million. Halloween would also be the registration date for Introducing Brokers.
The bill also creates a separate registration category for Forex Dealers and gives the CFTC tremendous leeway in crafting rules governing this new financial services category. There is no telling what the CFTC might come up with (tough new Margin Requirements? Customer Funds Segregation? New Dealing Practice Rules?)
All in all the industry is in for a massive overhaul in the next 12 months. There are sure to be a lot of tricks and treats ahead. Stay Tuned.
Breaking News: Senate Passes Farm Bill
The Farm Bill just passed the Senate in a landslide, 81-15, which is a veto proof margin. With veto proof margins in the House and Senate it is now clear that the Farm Bill is going to become law.
http://www.marketwatch.com/news/sto...32-5E1D-404F-B4A6-BFB7EDEF4CCB}&dist=hplatest
Bush is expected to veto the bill and it appears Congress is preparing to override the veto no later than Memorial Day.
In any case, this is a seminal day for the U.S. retail forex trading industry.
The Farm Bill just passed the Senate in a landslide, 81-15, which is a veto proof margin. With veto proof margins in the House and Senate it is now clear that the Farm Bill is going to become law.
http://www.marketwatch.com/news/sto...32-5E1D-404F-B4A6-BFB7EDEF4CCB}&dist=hplatest
Bush is expected to veto the bill and it appears Congress is preparing to override the veto no later than Memorial Day.
In any case, this is a seminal day for the U.S. retail forex trading industry.
Quote from forexsavior:
There is no telling what the CFTC might come up with (tough new Margin Requirements? Customer Funds Segregation? New Dealing Practice Rules?)
[/B]
by tough new magin rules do you mean maybe the CFTC could put a minimum amount to be able to trade spot forex? or would somthing like that still be left to the brokers to set? like in stocks to day trade you need a minimum of $25,000.
Quote from nexx:
by tough new magin rules do you mean maybe the CFTC could put a minimum amount to be able to trade spot forex? or would somthing like that still be left to the brokers to set? like in stocks to day trade you need a minimum of $25,000.
CFTC could possibly require traders set aside more money to trade on leverage.
âBush Will Loseâ
According to the Washington Post Bush will still veto the farm bill. However, the veto will not be sustained in Congress.
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/15/AR2008051503985.html
According to the Washington Post Bush will still veto the farm bill. However, the veto will not be sustained in Congress.
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/15/AR2008051503985.html
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.
The Autumn Equinox Pool
Itâs due diligence time once again. With the Farm Bill set to become law the trading public needs to start preparing for the changes just over the horizon. The following U.S. registered firms do not currently meet the first 120 day benchmark ($10 million) the Congress has recently set for Retail Forex Dealers according to the latest CFTC Net Capital Report:
http://www.cftc.gov/stellent/groups/public/@financialdataforfcms/documents/file/fcmdata0308.pdf
Now obviously some of these firms can come up with the money as several have large parent companies who are loaded (CMC and Hotspot for example.) But just as past dead pool members were unable to meet the former $5,000,000 mark so too is it likely that some Autumn Equinox Pool members will be unable to meet the upcoming $10,000,000 mark which is set to go into effect at the end of September should the legislation become law before Memorial Day as expected. Which firms may fold as a result? No one can say for sure. But I certainly would not want to be a trader at Bacera, Advanced Markets or Money Garden right now.
Since the worst of the forex dregs were purged in the last dead pool the likelihood of any of these firms going belly up like One World Capital is slim. Thatâs the good news. The bad news is firms that know they are going out of business have a strong incentive to really screw over their customers and give them the worst execution possible as they try to grab some traveling money before they have to hit the road. This is why Iâm recommending that traders avoid opening new accounts or depositing any additional funds with Advanced Markets, Bacera and MG Financial until they clearly demonstrate they can meet the new capital requirement.
I suspect the remaining firms will have enough capital to meet the $10 million requirement but traders who have accounts with these firms should be sure to speak with them and discuss the firmâs long term strategy for dealing with the full $20 million requirement. There is going to be a lot of mergers in the industry in the next twelve months and traders are likely to suffer in the chaos as customer service gets chopped up and dealing desks start really squeezing traders in their last dying days. Know in advance what you are in for and be sure to do your due diligence now more than ever.
Itâs due diligence time once again. With the Farm Bill set to become law the trading public needs to start preparing for the changes just over the horizon. The following U.S. registered firms do not currently meet the first 120 day benchmark ($10 million) the Congress has recently set for Retail Forex Dealers according to the latest CFTC Net Capital Report:
http://www.cftc.gov/stellent/groups/public/@financialdataforfcms/documents/file/fcmdata0308.pdf
Advanced Markets $5,100,000
Bacera $5,500,000
Money Garden $6,600,000
Easy Forex $7,200,000
MB Trading $7,700,000
Hotspot $7,700,000
Forex Club $7,900,000
Friedberg Mercantile $8,000,000
CMC $8,300,000
Alpari $8,800,000
Ikon $8,800,000
Now obviously some of these firms can come up with the money as several have large parent companies who are loaded (CMC and Hotspot for example.) But just as past dead pool members were unable to meet the former $5,000,000 mark so too is it likely that some Autumn Equinox Pool members will be unable to meet the upcoming $10,000,000 mark which is set to go into effect at the end of September should the legislation become law before Memorial Day as expected. Which firms may fold as a result? No one can say for sure. But I certainly would not want to be a trader at Bacera, Advanced Markets or Money Garden right now.
Since the worst of the forex dregs were purged in the last dead pool the likelihood of any of these firms going belly up like One World Capital is slim. Thatâs the good news. The bad news is firms that know they are going out of business have a strong incentive to really screw over their customers and give them the worst execution possible as they try to grab some traveling money before they have to hit the road. This is why Iâm recommending that traders avoid opening new accounts or depositing any additional funds with Advanced Markets, Bacera and MG Financial until they clearly demonstrate they can meet the new capital requirement.
I suspect the remaining firms will have enough capital to meet the $10 million requirement but traders who have accounts with these firms should be sure to speak with them and discuss the firmâs long term strategy for dealing with the full $20 million requirement. There is going to be a lot of mergers in the industry in the next twelve months and traders are likely to suffer in the chaos as customer service gets chopped up and dealing desks start really squeezing traders in their last dying days. Know in advance what you are in for and be sure to do your due diligence now more than ever.
Touring the Dead Pool Graveyard
Since starting up this thread many former forex firms are now pushing up the daisies, dead parrot style: http://www.youtube.com/watch?v=e6Lq771TVm4
Indeed, these firms have passed on. They have ceased to be. They have expired and gone to meet their maker. Theyâre stiff. Bereft of life they rest in peace. They have kicked the bucket and joined the bleedinâ choir invisible. These are ex-forex firms:
Rest in Peace
-The following firms are no longer functioning as independent registered forex dealers.
1. United Global Markets (Died May 2007. Cause: Undercapitalization)
2. Forward Forex (Died June 2007. Cause: Busted for Fraud)
3. Worldwide Forex (Died June 2007. Cause: Busted for Fraud)
4. Cal Financial Corporation (Died March 2007. Cause: Undercapitalization)
5. Nations LLC (Died July 2007. Cause: Undercapitalization)
6. FX Option1 Inc (Died June 2007. Cause: Busted for Fraud)
7. Trend Commodities (Died June 2007. Cause: Undercapitalization)
8. Performance Capital (Died June 2007. Cause: Buyout)
9. FiniFX (Died July 2007. Cause: Undercapitalization)
10. CFG Forex (Died February 2007. Cause: Undercapitalization)
11. Tradex Swiss AG (Died August 2007. Cause: Busted for Fraud)
12. Spencer Financial (Died June 2007. Cause: Undercapitalization)
13. One World Capital (Died November 2007. Cause: Undercapitalization)
14. ANTC (Died August 2007. Cause: Buyout)
15. Royal Forex (Died August 2007. Cause: Buyout)
16. Northfinance (Died May 2008. Cause: Buyout)
17. VelocityFX (Died December 2007. Cause: Undercapitalization)
18. Direct Forex (Died December 2007. Cause: Buyout)
19. E-FX (Died November 2007. Cause: Undercapitalization)
20. Solid Gold (Died December 2007. Cause: Undercapitalization)
21. FXLQ (Died December 2007. Cause: Busted for Fraud)
22. SNC Investments (Died December 2007. Cause: Undercapitalization)
23. WestCap FX (Died April 2008. Cause: Autopsy not Complete)
24. AleccohFX (Died February 2008. Cause: Busted for Fraud)
25. Finex (Died sometime in 2007. Cause: Busted for Fraud)
Thatâs twenty five firms by my count that have been closed or bought out on the Saviorâs watch. Thousands of traders have lost millions of dollars as a result of the chaos in the forex industry the past year and a half. Donât allow yourself to be the next victim. Be sure to trade with a well capitalized firm and make sure they are prepared for the coming capital requirement increase to $20 million.
Since starting up this thread many former forex firms are now pushing up the daisies, dead parrot style: http://www.youtube.com/watch?v=e6Lq771TVm4
Indeed, these firms have passed on. They have ceased to be. They have expired and gone to meet their maker. Theyâre stiff. Bereft of life they rest in peace. They have kicked the bucket and joined the bleedinâ choir invisible. These are ex-forex firms:
Rest in Peace
-The following firms are no longer functioning as independent registered forex dealers.
1. United Global Markets (Died May 2007. Cause: Undercapitalization)
2. Forward Forex (Died June 2007. Cause: Busted for Fraud)
3. Worldwide Forex (Died June 2007. Cause: Busted for Fraud)
4. Cal Financial Corporation (Died March 2007. Cause: Undercapitalization)
5. Nations LLC (Died July 2007. Cause: Undercapitalization)
6. FX Option1 Inc (Died June 2007. Cause: Busted for Fraud)
7. Trend Commodities (Died June 2007. Cause: Undercapitalization)
8. Performance Capital (Died June 2007. Cause: Buyout)
9. FiniFX (Died July 2007. Cause: Undercapitalization)
10. CFG Forex (Died February 2007. Cause: Undercapitalization)
11. Tradex Swiss AG (Died August 2007. Cause: Busted for Fraud)
12. Spencer Financial (Died June 2007. Cause: Undercapitalization)
13. One World Capital (Died November 2007. Cause: Undercapitalization)
14. ANTC (Died August 2007. Cause: Buyout)
15. Royal Forex (Died August 2007. Cause: Buyout)
16. Northfinance (Died May 2008. Cause: Buyout)
17. VelocityFX (Died December 2007. Cause: Undercapitalization)
18. Direct Forex (Died December 2007. Cause: Buyout)
19. E-FX (Died November 2007. Cause: Undercapitalization)
20. Solid Gold (Died December 2007. Cause: Undercapitalization)
21. FXLQ (Died December 2007. Cause: Busted for Fraud)
22. SNC Investments (Died December 2007. Cause: Undercapitalization)
23. WestCap FX (Died April 2008. Cause: Autopsy not Complete)
24. AleccohFX (Died February 2008. Cause: Busted for Fraud)
25. Finex (Died sometime in 2007. Cause: Busted for Fraud)
Thatâs twenty five firms by my count that have been closed or bought out on the Saviorâs watch. Thousands of traders have lost millions of dollars as a result of the chaos in the forex industry the past year and a half. Donât allow yourself to be the next victim. Be sure to trade with a well capitalized firm and make sure they are prepared for the coming capital requirement increase to $20 million.
The 20million cap is just one issue you we all should be taking into considerations when choosing a FX broker. From my prospective the most imported is; what are new category âforex dealersâ requirements? We know FX firms not related to banks or Futures firms yet able to reach the 20m mark will be soon classified under âa new classification âforex dealersâ dose anyone know these new rulesâ / were could they be read, and what are the chances of even the strongest capitalized forex dealers will be able to adapt their business models to comply?