FX Street Reports - You Decide FX Street has put together a very comprehensive review of the NFA Capital Requirement Proposal providing a number of links to magazine articles, current net capital numbers and other tidbits. Worth a look here: http://www.fxstreet.com/fundamental/analysis-reports/special-coverage/2007-08-30.html
Beware Swiss Brokers I came across this excellent post about the lack of regulation in Switzerland, as confirmed by Swiss Regulators themselves. Be very wary of doing business with a broker in Switzerland until the market gets regulated over there. Originally Posted by minter I requested info regarding a FX Brokerage firm in SWITZERLAND. The first reply is from SBFC (Swiss Federal Banking Commission) and the second reply is from MLCA (Money Laundering Controlling Authority) .I personally do not feel the SWISS regulators are not as proactive as the US side .What about UK 's FSA ? I will try to find out . Dear Sir , For the time being, financial intermediaries providing foreign exchange trading are not subject to licensing by the SFBC, provided that they exclusively deal in foreign exchange on the spot market. It is however intended to amend the law to the effect that foreign exchange trading becomes a privilege of authorised banks. Foreign Exchange dealers fall under the scope of the Anti-Money Laundering Act (AMLA). As such, they may be subject - unless they are a member of a recognised self regulatory body - to direct supervision by the AML Control Authority (Anti-Money Laundering Control Authority AMLCA) at the Swiss Federal Finance Administration, Christoffelgasse 5, 3003 Berne, phone +41 31 323 39 94, fax +41 31 323 52 61, www.gwg.admin.ch/e/index.htm. You may check this authority concerning forex brokers in Switzerland. We hope that we were able to help you further. Yours sincerely Secretariat of the SWISS FEDERAL BANKING COMMISSION sig. Christina Bürgi sig. Simone Flach Communication&Media Communication&Media Schwanengasse 12 P.O. Box CH-3001 Berne Phone +41 31 322 60 69 Fax +41 31 322 69 26 mailto:simone.flach@ebk.admin.ch http://www.ebk.admin.ch CH-3003 Bern, FFA, AMLCA, bdu By email xxxxxxxxxx@yahoo.com Sir , Our reference: 10-9/VER2007/wj Bern, 31 August 2007 Re: List of regulated forex brokers in Switzerland Dear Sir, We acknowledge receipt of your inquiry of 30 August 2007 and have to inform you that we cannot supply you with the requested list. Forex companies are not under prudential supervision. No security for deposited funds is therefore given and no supervision of the quality of the services provided takes place. Yours faithfully, Anti-Money Laundering Control Authority Brigitte Dumont Judith Wyss Adm. Assistant Adm. assistant
NorthFinance Alert While I'm on the subject of unregulated foreign firms I think it important that traders be aware of a firm called NorthFinance, which is not in any way regulated. And judging by the embarrassing grammatical errors prominently displayed on their website I'm guessing this is one rinky dink operation: http://www.northfinance.com/eng/forex-broker/ Northfinance is apparently registered in Belize and does its operations out of Cyprus? This bizarre choice of geographic jurisdictions alone should dissuade anyone from seriously considering opening an account with these guys. But if you need something more here are two statements from two government bodies from the two respective jurisdictions Northfinance calls home: Statement One: From the International Financial Services Commission of Belize http://www.ifsc.gov.bz/notices.html International Financial Services Commission, New Administration Building, Belmopan, Belize, C.A. 4 August 2006 WARNING NOTICE NORTH FINANCE COMPANY LTD It is notified for general information that NORTH FINANCE COMPANY LTD is not licensed by any competent authority in Belize to engage in foreign exchange transactions, or to engage in any other international financial services. All persons are asked to take note and exercise caution. GIAN C. GANDHI DIRECTOR GENERAL International Financial Services Commission Statement Two: from SEC of Cyprus http://www.naftemporiki.gr/news/story.asp?id=1405795 http://www.forexfactory.com/showpost.php?p=1587012&postcount=1 (Translation of Greek News Story) With an announcement today, the SEC of Cyprus informed the investing public that North Finance Ltd: -Has no License from the committee to provide investing services. -Is not a bank registered in Cyprus, with a license from the Central Bank of Cyprus, permitting to provide investment or similar services. -Is not established in Cyprus or provide services according to the Articles 24-30 of the law for Investment services companies." When a government agency warns the trading public âto take note and exercise cautionâ about a firm it has singled out for being unregulated the trading public should indeed "take note and exercise caution." And while you're at it you should probably double check to see if NorthFinance has opened a new branch office near your town in a van down by the river (http://www.youtube.com/watch?v=IQVr6f6FL5Y) now that the firm has been called out in Belize, Cyprus and who knows where next...
Well my money with OandA and MGFOREX is safe, but im interested to know of what is going on in the Swiss country
Forex Dealer Dead Pool (version 4.0) The CFTC has just released the latest Adjusted Net Capital Numbers. http://www.cftc.gov/marketreports/financialdataforfcms/index.htm Now that the NFA has officially raised the minimum capital requirement to $5 million (http://www.nfa.futures.org/news/newsRuleSubLetter.asp?ArticleID=1942) these numbers are more important than ever so pay close attention everyone. Poorly Capitalized Firms Advanced Markets ($1,042,000) American National Trading Corp (Merged with PFG) Bacera Corporation (Shutdown!) Cal Financial Corporation (Shutdown!) Direct Forex ($1,117,000) Easy Forex ($4,731,000) E FX Options ($3,342,000) Forex Club ($3,715,000) FiniFX (Not Accepting New Customers) Forward Forex (Shutdown!) FX Option1 Inc (Shutdown!) GFS Futures & Forex ($3,259,000) Hamilton Williams ($1,004,000) MB Trading ($2,393,000) Nations Investments (Shutdown!) One World Capital ($1,078,000) Performance Capital International (Vanished) Royal Forex Trading (Merged with IKON) SNC Investments ($1,130,000) Solid Gold Financial ($1,955,000) Spencer Financial (Shutdown!) Trend Commodities (Shutdown!) United Global Markets (Shutdown!) Worldwide Clearing (Shutdown!) Wall Street Derivatives ($1,220,000) Unregulated Firms (Buyer Beware) FXDD (?) GCI (?) WestCapFX (?) ACM (?) MIG (?) DukasCopy (?) GFX Group (Forex.CH) (?) Crown Forex (?) Krusty's Currency Trading (?) Tradex Swiss AG (Shutdown!) NorthFinance (?) We have just about reached the time for choosing. The brokers in the Dead Pool have known about the NFAâs plans to increase capital requirements for some time now. And yet most have not made much of an effort to increase their reported adjusted net capital (with the exception of Money Garden who just raised the reported capital to $5 million. As a result they have been removed from the pool.) Thatâs a major red flag in my book. As such I will continue my dispatches on the Dead Pool and warn traders to avoid these firms until they show they can meet the new capital requirement passed by the NFA and awaiting approval by the CFTC. One final note, I have included Swiss brokers in the âUnregulated Firms Buyer Bewareâ list. I have two words for anyone considering opening an account with an unregulated Swiss broker âTradex Swiss.â Donât make the same mistake the poor traders at Tradex Swiss AG made and trade with an unlicensed broker that is unaccountable to anyone because should the firm get into trouble NO ONE is going to help you get your money back.
forexsavior, I'm just curious if you are gathering all this information out of own interest or if you are working for some organisation? From the link you provided, I found the following comments from the NFA an interesting read. It mentions the abolition of the so called haircut charge and why fund segregation is not a realistic alternative. http://www.nfa.futures.org/news/newsProposedRule.asp?ArticleID=1941 btw, does the CFTC not have to approve the changes before they go into effect?
Forexsavior, I created a thread for another problem with brokers that you missed to mention in the last few months. http://elitetrader.com/vb/member.php?s=&action=getinfo&userid=79242
Please ignore the previous link , I have re attached it . http://elitetrader.com/vb/showthread.php?s=&threadid=104218
MSNBC Reports on Tradex The Mainstream Media is starting to pick up on the Tradex Swiss AG debacle that I have been covering the last few weeks. Let this be a warning to anyone trading with an unregulated Swiss Firm what can potentially happen to you. The Following Swiss Forex Brokers are unregulated just like Tradex Swiss AG WestCapFX ACM MIG DukasCopy GFX Group (Forex.CH) Crown Forex Currency Trading Firm at Center of Controversy http://www.msnbc.msn.com/id/20829464/ A Swiss-owned currency trading shop that was operating out of downtown Boston had its assets frozen by investigators from its home country and also is being investigated by Massachusetts authorities, according to court documents and multiple sources. Tradex Group LLC was managing at least $5 million for its clients, some of whom have gone to court in a bid to prevent any transfer of funds out of a Bank of America account based in a Boston branch. Tradex faces problems on both sides of the Atlantic. While the scope of the Massachusetts investigation is unclear, it is clear from public documents that the operation was running without having registered with the state, according to a spokesman for Secretary of State William F. Galvin. While failing to register as a securities business, Tradex did file articles of incorporation with the state in 2004. Also in the U.S., the National Futures Association, whose members trade futures including foreign currency, banned Tradex from taking part in trading on behalf of American clients in January. The NFA alleged in a complaint posted on the group's Web site that Tradex erred by soliciting investments for its Swiss parent company, which was not registered to do business on behalf of U.S. clients. Additionally, the Swiss Federal Banking Commission, which froze Tradex's assets in July, attributed the action to "licensing issues," according to people close to the situation. Representatives of the association declined to comment for this story. But court filings by other parties indicate that Tradex's parent and a sister company were not properly registered in Europe. Officials at Tradex's parent have been quick to distance themselves from the matter. In an e-mail to the Boston Business Journal, Tradex Swiss AG CEO Nicolaas Jansen van Rensburg said the Boston group's problems rest solely on the shoulders of its local employees. "I wish to point out that Tradex Group LLC is not our company. Tradex Swiss AG was a shareholder in the company," wrote van Rensburg. "Tradex Swiss AG was NOT involved in the running of the business." Meanwhile, the legal fight over the status of the frozen $5 million is underway. The former manager of the Boston office, Craig Karlis of Hopkinton, and three investors filed suit last month trying to block any transfer of the money. Karlis said he's owed unspecified back wages. "Craig Karlis and the other employees took it upon themselves to hire an attorney in an attempt to ensure that their clients' money is protected throughout the Swiss investigation," said Liam Floyd, the attorney representing Karlis and investor George Popescu. Joshua Cook, attorney for Wei Zheng and Pei Zhen Xin, the other investors involved in the suit, said his clients deposited $200,000 into the account after it was frozen by the Swiss investigators. He added that he has received inquiries from about another 100 concerned investors. Cook said his clients sued out of fear that their money will be used to satisfy other creditors' claims. Cook alleged that many currency traders "fail to adequately disclose the risks" associated with their businesses, but he did not link the broad statement to his clients' case. A Tradex officer said in an affidavit that "the trading agreements make clear (that) commodities investments are highly risky and highly speculative." According to court filings, the Swiss investigators argued it was necessary to freeze the Bank of America account to ensure that Tradex's assets are not improperly disbursed. The Swiss regulators said they plan to pay employees back wages once the investigation is complete. Attorney Evan Fray-Witzer, who is representing the Swiss investigators and Tradex Swiss, did not return calls seeking comment. On Aug. 16, Judge Alan van Gestel of the business litigation session in Suffolk Superior Court ruled that as the proceedings continue, the Swiss authorities can access all but $500,000 of the money in the now-frozen Bank of America account. Members of secretary Galvin's staff declined to say what the next step for his office will be. A spokeswoman from the National Futures Association said any allegations of illegal futures trading would be referred to the U.S. Commodity Futures Trading Commission for investigation. The commission neither confirms nor denies the existence of investigations on specific firms, agency spokesman Dennis Holden said. He did say the agency has been working to warn potential investors about the dangers of foreign currency futures trading, or "forex," in general.