Jason, thanks for responding to my previous question, however, your reply isn't satisfactory currently FXCM US, UK, elsewhere accepts accounts from Canadians resident in provinces other than BC what i want to know is how is it that a BC regulator can prevent FXCM and other foreign national businesses from doing business with me ? now i understand the regulations requiring a company having to locate in BC in order to do business - solicit clients, however i don't understand how provincial Canadian law is being applied to in this instance a UK company; why did FXCM UK choose to agree ? this question isn't really for the BC regulator alone - 'why are you preventing me from doing business with whoever i want', since it requires FXCM's and others agreement to not do business with me, and the regulations - so far as i know are not stating 'you, Wallace, are not allowed to open an fx account with non-BC resident fx brokers - it would be illegal' tho that's in essence what they do i'd appreciate you next answering my questions with more detail
Hi Wallace, I'm not sure how much detail I can give since it's a fairly simple reason. If we do business there, then we can be fined because we are breaking British Columbia securities law as set by the BCSC. Therefore we do not accept BC residents. The threat of legal action does not stop at the US/Canada border, or in this case UK/Canada. -Jason
This does not answer my question however as to why US citizens are not allowed to CFDs ??? According to your answer, I should be able to trade CFDs but your company does not allow me.............what is going on ???
Hi Gcapman, It's illegal for us to offer CFD contracts to US citizens due to US regulations. If you are a non-US citizen, then you can trade CFD's. I think not doing something because it is illegal is a fairly clear answer If it were possible, we would. However, we prefer not to break the law. Jason
I think the confusion here is securities/financial regulation turns regular law on its head. In order to commit a crime, the offender must reside in the jurisdiction to which those laws apply. But for securities law, a broker can reside outside the regulatory zone, and still "break" those foreign laws, so long as they accept business from a citizen within that regulatory zone. In reality, the broker did nothing wrong. They obeyed the domestic laws to which are governed. It was the trader who is guilty of breaking the "law". And it's not even a law. Just some stupid regulation. That's why the AG or Police can't intervene, because there's no statute or legislation outlawing this particular practice (ex PDTR or 100:1 leverage). The only method of "enforcement" is through these regulatory agencies (SEC, NFA, CFTC) in the form of fine, penalty, or revocation of license. FXCM doesn't want their FCM license pulled by the BC provincial Government, so they stay on the right side of BC regulators. Its not really a law, just a Government that controls rights to operate a business. If FXCM runs afoul of regs, they can't operate in BC. Or America. etc. By that logic, assuming it's right, the best option is to find an overseas broker with no US divisions or parents. Not sure if its possible.
Great points by achilles. This suggests that the answer to my question, is it true that by law only accredited US citizens may trade forex with non US brokers, is likely not true, else FXCM would prevent a lot of traders from opening accounts. But I'd like clarification from Jason.
On second thought, I'm not sure. FXCM UK says they'll take customers if the leverage cap gets passed. If they take American customers, then I'm wrong. Lets see what Jason has to say.
First blush, I think there was some language in the proposal (not the short version but the really long version that is 100+ pages) that indicated that it was okay for US traders to open accounts with foreign brokers... I'll try to find that part and post it here...might take me sometime since I don't remember exactly where it was
Thanks for being patient PlusMinus. Here is the answer from our compliance department: The CFTC has not placed any restriction on a US citizenâs FX trading outside of the US, and that we are unable to comment on the decision made by any of the aforementioned brokers. FXCM Ltd has accepted, and will continue to accept US clients based on FXCM Ltdâs entitlement to do so as a financial institution under Section 2(c)(2)(B)(i)(aa) of the Commodity Exchange Act, and as a regulated entity by the Financial Services Authority.
Back to the CFTC proposal... Your comments are now starting to go up on the CFTC website: http://www.cftc.gov/lawandregulation/federalregister/federalregistercomments/2010/10-001.html