FXCM will be hosting another currency trading expo in Las Vegas at the Rio on November 2-4, 2012. You can click here for a schedule of all the workshops. Over 30 workshops are currently schedule, and we anticipate adding more in the weeks ahead.
I was there at last year’s expo, and it was great getting to meet many of you. For those who didn’t attend last year, you can click here for videos from last year’s expo. Let me know if you have any questions.
I have an update on the FXCM Expo to be held in Las Vegas from Friday, November 2nd to Sunday, November 4th. E*TRADE has signed on as the premier sponsor and will be conducting workshops on Stocks, Options and Futures trading.
For those of you who've asked me about it in the past, I wanted to let you know that we've officially opened beta testing for Ninja Trader. You can sign up by visiting this webpage and clicking on the Ninja Trader section. A form will appear for you to request entry into the beta.
This week the CFTC will be holding a public roundtable to address the concerns of traders in response to the bankruptcies of PFG and MF Global. FXCM would like to announce its own proposals to help restore confidence for futures and forex traders in the United States.
Proposals to Bring Full Market Transparency and Accountability to the Futures/Forex Industry
The collapse of PFG Best (following so closely after the collapse of MF Global) has sent shockwaves all across the United States. The trading public has serious concerns about the integrity of the futures market and many are questioning whether Futures Commission Merchants (FCM’s) can be trusted to hold client funds. There exists today a crisis of confidence amongst retail futures and forex traders that has never existed before. If not addressed immediately, these markets will be irreparably damaged for years to come.
The following proposals are intended to bring market transparency to the industry by restoring investor confidence in FCM’s.
1) Require All FCM’s to Publicly Publish Their Financials Once a Quarter:
Currently, the CFTC publishes monthly “Net Capital” reports that disclose to the public how much money a Futures Commission Merchant has set aside in capital. However, that report provides very little insight into how well the company is doing financially. By requiring FCM’s to publish their audited financials the trading public will know how much risk they are taking with each firm since investors will be able to weigh the liabilities along with the excess capital that a Futures Commission Merchant has.
Furthermore, the published financial statement should include everything (i.e. holding company’s financials) since what happens to other subsidiaries of the company can easily effect the regulated FCM. Each company should be required to provide a link to its financials on its own homepage so that the public can do its proper due diligence.
Too often, those FCM’s that are teetering on the edge of bankruptcy lure customers in by offering unsustainable gimmicks (dirt cheap commissions, account opening bonuses) that temporarily puts off the inevitable. Customers should be aware of the perilous finances of those FCM’s that would offer these kinds of gimmicks before opening an account with such a firm. PFG Best was a classic example of a firm that used such gimmicks as they routinely low balled their competitors with uneconomical discounts that no reputable, legally compliant firm could match.
2) Require all FCM’s to Employ a Top Ten Accounting Firm:
There need to be much higher accounting standards than currently exist in the FCM world. The Platt Group publishes an annual ranking of public accounting firms that could be used by FCM’s. Whether it is top 10 or top 25, the main point is that FCM’s must use a nationally recognized and respected accounting firm that could apply the same tough standards to FCM’s that publicly traded companies must meet.
While no one proposal will guarantee that a future FCM will not fail, these proposals will help restore the confidence of traders by bringing greater market transparency and accountability into the world of futures/forex trading.
Traders can show their support for these proposals by leaving comments with the CFTC using the following web page:
Last Thursday the CFTC held a public hearing to determine what steps should be taken to repair the damage done by the bankruptcies of PFG and MF Global. I’d like to share with everyone some of the highlights of the hearing:
Better Accounting Standards: There was much discussion of auditing standards for both Regulators of FCM’s and the CPA’s who audit FCM’s. There was general agreement these standards need to be raised. FXCM believes FCM’s should be required to use a top accounting firm to avoid the kind of accounting issues that plagued PFG.
Additional Disclosure Requirements: An extensive discussion on FCM transparency was held and it is clear that FCM’s are going to have to make more disclosures of their books to regulators and to the public. The question is how much is to be disclosed? On the one hand there was testimony from FCM’s like Vision who publish their balance sheet on their website and on the other hand were those who were concerned that too much disclosure could lead to possible “bank runs” by investors. FXCM believes investors should be able to see a company’s audited financial statement once a quarter. Too many investors are forced to fly blind when they choose a Futures Commission Merchant or Forex Dealer. No trader should be subjected to this kind of risk post-PFG.
Insurance: Commissioner Bart Chilton released his proposal for a futures insurance fund on the same day of the hearing. Towards the end of the Roundtable the topic turned to insurance and John Roe of the Commodity Customer Coalition once again made a forceful case for a fully insured fund for the futures industry. As of now, Commissioner Chilton’s proposal does not include retail forex, but there is no reason that it shouldn’t. FXCM supports insurance for the futures/forex industry.
The CFTC will now deliberate into October before announcing their proposals. We encourage everyone to comment using the link below:
Mr. Gellert makes the following comment about the benefits of FCM’s being required to disclose their audited financials:
Would Mr. Wasendorf have been as ready to invent financials if his customers had demanded full, audited balance sheets and income statements all along? Would Mr. Wasendorf have been able to compose such reports with sufficient skill as to withstand rigorous third-party examination over twenty years? Rapid Ratings recalls that, by applying large numbers of interrelated calculations to the published reports of Enron, our firm was able to detect vivid inefficiencies entirely inconsistent with the investment grade ratings that Enron enjoyed from the larger rating agencies – inefficiencies that later turned out to have been the result of commingling accurate and fabricated reporting lines.
Mr. Gellert’s point about the difficulty of forging financial documents using the kind of standards that publicly traded companies use is well taken. Had PFG been forced to use such standards Wasendorf’s scam would have likely been caught long before July of 2012. Furthermore, ratings agencies like Rapid could break down the data in a manner that average investors could more easily understand. Although, we disagree that only ratings agencies be allowed to see such data. We believe any trader who opens an account with a FCM or Forex Dealer should be able to judge for themselves a firm’s financial health.
We just released an update on Apple App Store and Google Play (Android Market) for Trading Station Mobile phones and tablets to include new language options. The platform now supports English, Chinese(Simple), Chinese (Traditional), Japanese, German, Spanish, Italian, French, Greek, Russian and Turkish. Your phone or tablet will not force you to update the program, so to make sure you have the latest version, go under Settings and make sure you have Version 1.4.080712.
Below are links to User Guides for FXCM Trading Station Mobile. We have versions of the platform for iPhone, iPad, and Android phones and tablets.