10:1 could be the new leverage rule

Hi Wallace,

BC regulations require any broker accepting accepting accounts from BC residents to be regulated by the British Columbia Securities Commission. Any broker not registered in BC and accepting BC residents would be subject to legal actions. FXCM UK is regulated by the FSA in the United Kingdom and not British Columbia, therefore it cannot accept BC residents.

If this were the case, I doubt the retail forex market would be targeted due to the size of retail trading volumes compared to the whole. According to data in this recent Financial Times article (http://www.ft.com/cms/s/0/97077034-ffaf-11de-921f-00144feabdc0.html), retail forex trading is a little over 3% of daily FX volume.

-Jason

 

I would think so unless there is a large public response. Proposals put forth by our regulators are usually made with intent to enact. That's why it's important to voice your concern.

FXCM and other brokers are actively lobbying against it, but our opposition will not have the same impact since the proposal was made from the stand point of the public's interest. Francesc from FX Street has a post on his blog with the list of brokers in the coalition. http://blogs.fxstreet.com/francesc/...ond-cftc-proposal-to-limit-leverage-10-to-1/.

-Jason

 

Thanks for your honesty and professionalism...

So how would FXCM UK traders be affected? Were this 10:1 leverage to be passed in the US.

Thanks!

 

Can anyone, Jason, answer my question about whether US citizens are even allowed to trade retail Fx hrough foreign brokers without being accredited? Seems people keep dancing around this question.

 

Hopefully not at all. I switched to FXCM UK back at the last leverage lowering.

I don't need the leverage, but these US regulators can eat shit. If FXCM opens up shop in some third world country I'll be the first to join up. Screw all these regulators.

 

Foreign fx firms outside of US don’t really follow the US CFTC/NFA rules. They follow the guidelines set by their own government. You can trade whatever leverages they give in their countries unless their regulations specifically forbid US citizens to trade in their countries, which is very very rared. If this passed, US retailed forex sector will be decimated. Thousands of people work in US firms will proably lose their jobs. Big players like Goldman Sachs, JPmorgan, Citibank, etc. won’t be affected that much though.

 

I'll say it again. A large broker in the UK told me that they won't open up accounts for US citizens unless they are accredited (wealthy). This broker claimed that the NFA set this rule in the US, implying that the regulation limits the citizen, and they the broker were just following and honoring it. Is this true, or is it BS? Has the CFTC or NFA barred citizens from trading FX outside of US unless they are accredited? Jason should know this since works for a large UK broker. Jason are you ignoring the issue because it's true, or because you don't know the answer?

 

Hi PlusMinus,

Thanks for the question, and I apologize about the delay in replying to your post. I will ask our compliance department specifically about this.

I have heard of non-US brokers not accepting US residents as well. At this point my guess is that it's because they are not registered in the US therefore don't want to run afoul of US regulators. But I will try to get a definitive answer for you, and reply back once I have more information.

Jason

 

If I'm understanding this correctly, the above proposed is for SPOT FOREX and not currency futures like 6E, 6A, 6J etc??

 

Thanks. Naturally your compliance department would know. Look forward to what they say.