Does anyone know if one can get around the CFTC restrictions by becoming a broker dealer or CTA or associated person or some such? Can this be done at modest cost if as a broker dealer you will have no clients other than yourself?
Im a CTA and I can tell you that since CTAs are regulated by the CFTC, they are bound by the new rules. If you trade from the U.S, any FX spot broker(whether it be U.S. or foreign) must adjust the new leverage limits into compliance with 50:1 limit for all CTAs based in the USA
It is soooo good to have dual citizenship I'm a lucky one. US govt specifically targets middle class so we never can get out of rat race. Remember? First they limited stock day trading to a minimum $25K to open an account. So you cannot start lower - you should already be rich. Now they limited forex leverage to 1:50 and closed possibility to trade gold on margin, plus no offshore trading, unless you already have millions. Next step is expected - prohibit forex altogether if you have less than $XXX. Only rich would be able to get richer. And we - doomed to work for our "masters" till the death. So, it is soooo good to have spare citizenship Yeah!
Note though that U.S. regulations restrict foreign forex brokers from dealing with U.S. residents whether or not they have another citizenship. Here is a quote from one broker: http://www1.hymarkets.com/cusagreement/Terms of Business.pdf : "If it comes to our notice at any time that you are resident in the United States, Hong Kong or any other country in which we consider that the provision of the services contemplated in the HY Markets Customer Agreement is prohibited, we shall have the right to suspend all activity in the Account and to take the following action: ...." Plus, get this: "if the Account is in credit and if the amount is more than the initial amount deposited, the amount deposited will be refunded as mentioned in a) above. The treatment of any remaining balance will be resolved by our Compliance Department." In other words, they might confiscate your profits!
1. Visit country of second citizenship for a couple weeks. 2. Open LLC-like there. Open forex account with offshore broker as an institution (using LLC account and your data of THAT country). 3. Move back to US. 4. Trade forex as of that LLC. 5. Keep all profits at that LLC, pay LLC's taxes to that country, pay no taxes in US (_you_ are not getting income, _LLC_ does). 6. Once rich , move to that coutry for 7 months, pay yourself 100% from that LLC account, pay income taxes (again to THAT country) second time. 7. Move back to US. BINGO! Keep in mind, foreign LLC-like structure is NOT governed by US laws (thankfully). So you are clean law-wise. The only downside - taxes are paid twice (to another country), but that's the price to pay for the freedom from US govt outrage enslavement of it's own citizens.
Sounds attractive! Actually I believe that quite a few foreign countries (including even some in Canada, as well as all of the offshore tax havens) permit creation of a company with all foreign (e.g. USA) directors and shareholders. So I believe that a U.S. citizen and resident with no foreign citizenship can do the same thing. One has to be careful not to run afoul of anti-avoidance "dummy corporation" rules and the PFIC and holding company restrictions of U.S. law. I have not looked into these in detail yet. However, in the UBS case, the IRS maintained that the foreign corporations set up by U.S. taxpayers were shams aimed at tax evasion. Have you checked that out?
There are many amendments to the Dodd-Frank Act being proposed as well as an outright repeal (H.R.87). There is so much in that law (Dodd-Frank Act), but the only thing I know I don't like is making it illegal for me to trade offshore. Research the bills and write your representative. http://www.opencongress.org/ Not sure if this subject will post so I'm putting it here again: Court of Appeals rules health care law unconstitutional So there is hope. FYI: FXDD is offering true Dukascopy feeds as advertised and claims to offer the same commission schedule. The only drawback in my book may be the 50:1 leverage and FIFO. I'll likely concede to that rather than become an outlaw. Alpari clearly stated they would have fixed spreads (while using Dukascopy feeds :eek: )