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Proposed NFA Capital Requirement
- Thread starter forexsavior
- Start date
Winds of Change Blowing in Switzerland
After years of fraud and malfeasance perpetrated by Bernie Madoff style Swiss forex brokers the retail forex business in Switzerland is on the verge of going legit as all Swiss brokers must either get a banking license or close up shop. However, these changes are still months away and thus many Swiss forex brokers continue to operate without a license.
But the good news is that the legit brokers are making themselves known. MIG Investments has just issued a press release stating that they have formally submitted their banking license application to the SFBC. This is no small feat and MIG should be congratulated on taking this first step:
http://www.migfx.ch/news/press-rele...pL]=2678399&tx_ttnews[arc]=1&cHash=2baa9bee91
Other Swiss brokers are moving in the same direction as well. However, one broker may be hitting a road block; Crown Forex. A disturbing report over at Forex Peace Army indicates the broker appears to be having difficulties making good on customer withdrawal requests
Now it should be noted that Forex Peace Army isnât exactly The London Times and thus this report comes with a pretty big grain of salt. Forex Factory has since dumped the thread into the recycling bin:
http://www.forexfactory.com/showthread.php?p=2412692&highlight=crown+forex#post2412692
Crown Forex has been notified about this report and been given an opportunity to respond by Forex Factory and rest assured their response will be included on this thread once it is given. Also, Crown Forex has announced that they plan on having 15 million Francs on hand to meet the SFBCâs capital requirement according to this recent press release: http://blogs.fxstreet.com/francesc/2008/11/10/crown-forex-increases-its-share-capital/
But the numerous instances detailed in the Peace Army report about Crown Forex not making good on customer withdrawals is very troubling and something traders should be aware of.
Again, the Saviorâs advice is to wait until these brokers actually gets their banking license before opening an account with any broker based in Switzerland.
After years of fraud and malfeasance perpetrated by Bernie Madoff style Swiss forex brokers the retail forex business in Switzerland is on the verge of going legit as all Swiss brokers must either get a banking license or close up shop. However, these changes are still months away and thus many Swiss forex brokers continue to operate without a license.
But the good news is that the legit brokers are making themselves known. MIG Investments has just issued a press release stating that they have formally submitted their banking license application to the SFBC. This is no small feat and MIG should be congratulated on taking this first step:
http://www.migfx.ch/news/press-rele...pL]=2678399&tx_ttnews[arc]=1&cHash=2baa9bee91
Other Swiss brokers are moving in the same direction as well. However, one broker may be hitting a road block; Crown Forex. A disturbing report over at Forex Peace Army indicates the broker appears to be having difficulties making good on customer withdrawal requests
Now it should be noted that Forex Peace Army isnât exactly The London Times and thus this report comes with a pretty big grain of salt. Forex Factory has since dumped the thread into the recycling bin:
http://www.forexfactory.com/showthread.php?p=2412692&highlight=crown+forex#post2412692
Crown Forex has been notified about this report and been given an opportunity to respond by Forex Factory and rest assured their response will be included on this thread once it is given. Also, Crown Forex has announced that they plan on having 15 million Francs on hand to meet the SFBCâs capital requirement according to this recent press release: http://blogs.fxstreet.com/francesc/2008/11/10/crown-forex-increases-its-share-capital/
But the numerous instances detailed in the Peace Army report about Crown Forex not making good on customer withdrawals is very troubling and something traders should be aware of.
Again, the Saviorâs advice is to wait until these brokers actually gets their banking license before opening an account with any broker based in Switzerland.
Crown Forex on Life Support
It appears the Peace Armyâs muck raking was well founded in regards to Crown Forex. Kudos to Pharoah for being ahead of the curve:
http://www.forexfactory.com/showthread.php?p=2412692&highlight=crown+forex#post2412692
Swiss banking regulators have launched an investigation of Crown Forex and appointed several care takers to administer the firmâs last rites. Here is the official announcement from the SFBC (rough translation from Google):
https://www.shab.ch/shabforms/COMMO...=2&page=/COMMON/search/searchresultDetail.jsp
For breaking news on the investigation of Crown Forex check this thread here which recently posted an alleged letter from the SFBC regarding their investigation of Crown Forex:
http://www.forexfactory.com/showthread.php?t=139777
Iâve said it before and Iâll say it again. DO NOT TRADE with a Swiss forex broker UNTIL they get a banking license. There are plenty of decent brokers that are regulated all around the world from Australia to the UK to the U.S. Crown Forex is just the latest example of what can happen when you trade with an unregulated broker.
It appears the Peace Armyâs muck raking was well founded in regards to Crown Forex. Kudos to Pharoah for being ahead of the curve:
http://www.forexfactory.com/showthread.php?p=2412692&highlight=crown+forex#post2412692
Swiss banking regulators have launched an investigation of Crown Forex and appointed several care takers to administer the firmâs last rites. Here is the official announcement from the SFBC (rough translation from Google):
https://www.shab.ch/shabforms/COMMO...=2&page=/COMMON/search/searchresultDetail.jsp
The Federal Banking Commission has appointed Laurent Winkelmann, of Geneva, Chêne-Bougeries and Philippe von Bredow, Lausanne, in Celigny responsible investigation Crown Forex SA. Laurent Windelmann and Philippe von Bredow are authorized to bind the Crown Forex SA by individual signature. It is forbidden for bodies Crown Forex SA to carry out any legal act without the agreement of the responsible investigation.
For breaking news on the investigation of Crown Forex check this thread here which recently posted an alleged letter from the SFBC regarding their investigation of Crown Forex:
http://www.forexfactory.com/showthread.php?t=139777
Dear (name omitted)
In response to our e-mail dated 16 December 2008, we would like to present to you the following information:
As already informed, the Crown Forex SA, Bassecourt has no authorization by the Swiss Federal Banking Commission (SFBC) for an activity in the financial sector in Switzerland.
To clarify the existence of the authorization requirements, in cases of suspected law violations or suspected pursuit of activities without proper authorization and in danger of insolvency, the SFBC investigators have to clarify the facts to use.
For the SFBC, acting in such cases, a superprovisional decision is available for use of an investigation officer. These investigators are charged with the investigation of the business activities of the company and are to report to the SFBC. The investigation officers are equipped with all necessary power and as such they appear in the commercial registry. They can act now on behalf of the firm. That is the case for the Crown Forex AG with superprovisional order as of 9 December 2008 (published in the Gazette on 18.12.2008) were Mr. Laurent Winkelmann, Chêne-Bougeries and Mr Philippe of Bredow, Célignym, investigators to the Crown Forex SA, were appointed.
On the basis of the report of the investigation officers the SFBC will make a decision and, where appropriate, publish it on its website. At the moment we can offer no further details. You or your contacts in the U.S. are invited to contact us again at a later stage.
Yours sincerely
Secretariat
SWISS FED. BANKING COMMISSION
Iâve said it before and Iâll say it again. DO NOT TRADE with a Swiss forex broker UNTIL they get a banking license. There are plenty of decent brokers that are regulated all around the world from Australia to the UK to the U.S. Crown Forex is just the latest example of what can happen when you trade with an unregulated broker.
Crown Forex Update
Just received this update from someone who has been involved in the controversy at Crown Forex. This would explain the withdrawal difficulties customers have been experiencing.
Developing...
Just received this update from someone who has been involved in the controversy at Crown Forex. This would explain the withdrawal difficulties customers have been experiencing.
The skinny at Crown. Wanted to let everyone know what's really going on with Crown. First of all the people who were having problems withdrawing were carry traders who were not paying any interest with Crown. Crown realized some of these guys were holding GBP/JPY long term and not paying the normal fee for doing so. As a result they froze the accounts and tried to retroactively charge the clients a fee. The clients were not willing to pay it and complained to the Swiss authorites. I was able to negotitate the return of all my client's money so that he would not pay any fees. He was the biggest carry trader over there and one of the guys on FPA. Well they started to pay him but the investigation he helped get launched now will prevent him or anyone else from getting any money out of Crown at all intll the investigation finishes. So it's a lose lose for everyone involved.
Scott Kuehne
FX Traders Inc.
Developing...
The Forex Savior Seal of Approval
In light of the government takeover of Crown Forex I am once again being asked, âwhich specific broker do you recommend?â That is not for the Savior to say. Different brokers have different products and all traders should conduct a regulatory background check and thoroughly demo test a brokerâs platform before opening a live trading account.
That said there are many solid brokers in the market place who are regulated and unlikely to go under anytime soon. Here is the Saviorâs list of approved brokers:
U.S. Based Brokers
1. Oanda
2. FXCM
3. Gain Capital
4. GFT Forex
5. FX Solutions
6. Interbank FX
7. CMS Forex
European Based Brokers
1. Saxo Bank
2. IG Index
3. CMC Markets
4. MF Global
5. City Index
Banks
1. DBFX
2. CitiFX
I have omitted smaller based U.S. brokers who have yet to meet the $20 million capital threshold, Swiss brokers who have yet to get a banking license and any offshore broker hiding out in shady jurisdictions such as Cyprus or Belize.
Of course, any of the brokers on the Saviorâs list of âapprovedâ brokers could run into trouble in the future. If Lehman Brothers and Bear Stearns can vanish overnight no financial institution is immune from insolvency. Already, I have reported on the financial troubles of both Saxo Bank and CMC markets in the last few months. But even taking into consideration the mass layoffs at both firms neither is likely to go belly up and take customer deposits with them.
In addition most of the U.S. based brokers on my list have had various regulatory actions taken against them (none of them however were charged with any financial violations and were related to marketing practices, which doesnât interest me.)
Iâm sure there are readers thinking to themselves, âthat broker on your list is a crook and a cheat so how can you approve them?!â Simple, because those who feel one of these brokers has cheated them always has the option of filing a complaint with the appropriate regulator and have your day in court. But if you are trading with an unlicensed broker youâll be lucky to even get a customer service agent on the phone to complain to in the first place let alone actually have an arbiter hear your case.
In short, I would feel comfortable opening an account with any of these brokers. Hence the reason they have been given âThe Forex Savior Seal of Approval.â
In light of the government takeover of Crown Forex I am once again being asked, âwhich specific broker do you recommend?â That is not for the Savior to say. Different brokers have different products and all traders should conduct a regulatory background check and thoroughly demo test a brokerâs platform before opening a live trading account.
That said there are many solid brokers in the market place who are regulated and unlikely to go under anytime soon. Here is the Saviorâs list of approved brokers:
U.S. Based Brokers
1. Oanda
2. FXCM
3. Gain Capital
4. GFT Forex
5. FX Solutions
6. Interbank FX
7. CMS Forex
European Based Brokers
1. Saxo Bank
2. IG Index
3. CMC Markets
4. MF Global
5. City Index
Banks
1. DBFX
2. CitiFX
I have omitted smaller based U.S. brokers who have yet to meet the $20 million capital threshold, Swiss brokers who have yet to get a banking license and any offshore broker hiding out in shady jurisdictions such as Cyprus or Belize.
Of course, any of the brokers on the Saviorâs list of âapprovedâ brokers could run into trouble in the future. If Lehman Brothers and Bear Stearns can vanish overnight no financial institution is immune from insolvency. Already, I have reported on the financial troubles of both Saxo Bank and CMC markets in the last few months. But even taking into consideration the mass layoffs at both firms neither is likely to go belly up and take customer deposits with them.
In addition most of the U.S. based brokers on my list have had various regulatory actions taken against them (none of them however were charged with any financial violations and were related to marketing practices, which doesnât interest me.)
Iâm sure there are readers thinking to themselves, âthat broker on your list is a crook and a cheat so how can you approve them?!â Simple, because those who feel one of these brokers has cheated them always has the option of filing a complaint with the appropriate regulator and have your day in court. But if you are trading with an unlicensed broker youâll be lucky to even get a customer service agent on the phone to complain to in the first place let alone actually have an arbiter hear your case.
In short, I would feel comfortable opening an account with any of these brokers. Hence the reason they have been given âThe Forex Savior Seal of Approval.â
Quote from forexsavior:
Huh? What are you smoking Big Gun? What trader wouldn't want to trade with a firm that isn't allowed to take confiscate profits from your account? If you want to trade with some offshore bucketshop that freely swipes profits out of the accounts of winning traders they are plenty of sharks you can deal with.
But I'm guessing most traders prefer the NFA's approach.
Rather be smoking anything over accepting the propaganda your peddling!!
To answer your question â Yesâ after learning what a great job your US based regulators are doingâ Yes I would prefer to stay far away from US based firms.
First of , Itâs obvious to plenty what the US FX systems ( or should I say club) is doing, first get rid of the small players to limit invitations and competivenessâ and monopolize the game for an exclusive club then start to âput the disadvantages to the traderâ and flees the âbrained washedâ who believe the propaganda your peddling.
I have spent long time in this game, long before the US joined in 99 and never ever had the issues Iâve seen until I started using US based firms. .
The US regulatory system is and has been scud for a long time, finally after this crises madoff , CDS, gov market manipulation the people are finally catching on.
Ill take my chances after all Iâm I am a man and donât need some wolf in sheep's clothing making sure Iâm safe.
ACM Throws in the Towel
ACM is officially closing their U.S. office and retreating back to Switzerland after failing to make any headway in the U.S. Of course the Savior has long suspected this Swiss broker wouldnât last very long on this side of the pond in light of the increased capital requirements. Furthermore, I was right on the money in stating they clearly didnât due their homework before opening an office here. The company was a registered NFA member for less than 12 months. What a wretched waste of money, time and man hours to set up an overseas office and then close it down in less than a year. This is not the sign of a company with a master plan. If they were publically traded Iâd be shorting them with the intensity of a day trader dealing in shares of General Motors. Here is the official statement from ACM which you can find on the front page of their website: http://www.acmusa.com/
I love how these brokers close up shop and give their customers barely any notice before their positions are forcibly liquidated. One day you are trading with a long term strategy waiting for a position to retrace and the next your broker sticks a fork in your positions and blows up your account. And ACM celebrates this as a âMilestone,â to be ranked right up there with the invasion of Normandy and the first man landing on the moon perhaps. This is why it is so important for traders to make sure their broker is around for the long haul. And as the record shows, Swiss brokers are anything but safe long term bets.
Weâll be waiting to see if you get that bank license guys but as of now ACM is an unregulated Swiss broker and should be avoided until they once again submit themselves to real regulation.
ACM is officially closing their U.S. office and retreating back to Switzerland after failing to make any headway in the U.S. Of course the Savior has long suspected this Swiss broker wouldnât last very long on this side of the pond in light of the increased capital requirements. Furthermore, I was right on the money in stating they clearly didnât due their homework before opening an office here. The company was a registered NFA member for less than 12 months. What a wretched waste of money, time and man hours to set up an overseas office and then close it down in less than a year. This is not the sign of a company with a master plan. If they were publically traded Iâd be shorting them with the intensity of a day trader dealing in shares of General Motors. Here is the official statement from ACM which you can find on the front page of their website: http://www.acmusa.com/
ACM USA's white-label licensor, ACM â Advanced Currency Markets SA (âAC-Marketsâ), announces another milestone in its already impressive and successful history: the formation and creation of ACM Bank. The ACM Group proudly announces the planned reorganization of the ACM Family under the new ACM Bank.
In an effort to ensure greater security, safety, and enhanced banking and investment services to their clients, ACM Group is in the process of applying for its Swiss banking license.
As a result, for the short term ACM USA will no longer be an active NFA member. This means that ACM USA will no longer act as a counterparty to forex positions and will not continue to service client accounts. Instead, ACM USA will remain a licensed office to AC-Markets assisting in the opening of forex trading accounts directly with AC-Markets and in the future with ACM Bank. AC-Markets is not a National Futures Association (âNFAâ) member firm and cannot accept U.S. customers until the approval of its Banking license.
Please note the coming date which is of importance to your ACM USA forex trading account.
⢠On January 8, 2009 at 9:00 a.m. EST, all open forex positions and accounts will be closed at the prevailing market price.
You may continue to trade or close your ACM USA account until the above mentioned date. However, should you not take any action before the above mentioned date, your account will be closed and the account balance will be returned to you by check.
I love how these brokers close up shop and give their customers barely any notice before their positions are forcibly liquidated. One day you are trading with a long term strategy waiting for a position to retrace and the next your broker sticks a fork in your positions and blows up your account. And ACM celebrates this as a âMilestone,â to be ranked right up there with the invasion of Normandy and the first man landing on the moon perhaps. This is why it is so important for traders to make sure their broker is around for the long haul. And as the record shows, Swiss brokers are anything but safe long term bets.
Weâll be waiting to see if you get that bank license guys but as of now ACM is an unregulated Swiss broker and should be avoided until they once again submit themselves to real regulation.