Proposed NFA Capital Requirement

Agreed

 

I agree, these are good changes for the fx industry.

 

hedging is for losers. how will the firms know who the losers are now and not hedge them?

 

Winds of Change Blowing in Switzerland

After years of fraud and malfeasance perpetrated by Bernie Madoff style Swiss forex brokers the retail forex business in Switzerland is on the verge of going legit as all Swiss brokers must either get a banking license or close up shop. However, these changes are still months away and thus many Swiss forex brokers continue to operate without a license.

But the good news is that the legit brokers are making themselves known. MIG Investments has just issued a press release stating that they have formally submitted their banking license application to the SFBC. This is no small feat and MIG should be congratulated on taking this first step:
http://www.migfx.ch/news/press-rele...pL]=2678399&tx_ttnews[arc]=1&cHash=2baa9bee91

Other Swiss brokers are moving in the same direction as well. However, one broker may be hitting a road block; Crown Forex. A disturbing report over at Forex Peace Army indicates the broker appears to be having difficulties making good on customer withdrawal requests

Now it should be noted that Forex Peace Army isn’t exactly The London Times and thus this report comes with a pretty big grain of salt. Forex Factory has since dumped the thread into the recycling bin:

http://www.forexfactory.com/showthread.php?p=2412692&highlight=crown+forex#post2412692

Crown Forex has been notified about this report and been given an opportunity to respond by Forex Factory and rest assured their response will be included on this thread once it is given. Also, Crown Forex has announced that they plan on having 15 million Francs on hand to meet the SFBC’s capital requirement according to this recent press release: http://blogs.fxstreet.com/francesc/2008/11/10/crown-forex-increases-its-share-capital/

But the numerous instances detailed in the Peace Army report about Crown Forex not making good on customer withdrawals is very troubling and something traders should be aware of.

Again, the Savior’s advice is to wait until these brokers actually gets their banking license before opening an account with any broker based in Switzerland.

 

Crown Forex on Life Support

It appears the Peace Army’s muck raking was well founded in regards to Crown Forex. Kudos to Pharoah for being ahead of the curve:

http://www.forexfactory.com/showthread.php?p=2412692&highlight=crown+forex#post2412692

Swiss banking regulators have launched an investigation of Crown Forex and appointed several care takers to administer the firm’s last rites. Here is the official announcement from the SFBC (rough translation from Google):

https://www.shab.ch/shabforms/COMMO...=2&page=/COMMON/search/searchresultDetail.jsp

For breaking news on the investigation of Crown Forex check this thread here which recently posted an alleged letter from the SFBC regarding their investigation of Crown Forex:

http://www.forexfactory.com/showthread.php?t=139777

I’ve said it before and I’ll say it again. DO NOT TRADE with a Swiss forex broker UNTIL they get a banking license. There are plenty of decent brokers that are regulated all around the world from Australia to the UK to the U.S. Crown Forex is just the latest example of what can happen when you trade with an unregulated broker.

 

Crown Forex Update

Just received this update from someone who has been involved in the controversy at Crown Forex. This would explain the withdrawal difficulties customers have been experiencing.

Developing...

 

The Forex Savior Seal of Approval

In light of the government takeover of Crown Forex I am once again being asked, “which specific broker do you recommend?” That is not for the Savior to say. Different brokers have different products and all traders should conduct a regulatory background check and thoroughly demo test a broker’s platform before opening a live trading account.

That said there are many solid brokers in the market place who are regulated and unlikely to go under anytime soon. Here is the Savior’s list of approved brokers:

U.S. Based Brokers

1. Oanda
2. FXCM
3. Gain Capital
4. GFT Forex
5. FX Solutions
6. Interbank FX
7. CMS Forex

European Based Brokers

1. Saxo Bank
2. IG Index
3. CMC Markets
4. MF Global
5. City Index

Banks

1. DBFX
2. CitiFX

I have omitted smaller based U.S. brokers who have yet to meet the $20 million capital threshold, Swiss brokers who have yet to get a banking license and any offshore broker hiding out in shady jurisdictions such as Cyprus or Belize.

Of course, any of the brokers on the Savior’s list of “approved” brokers could run into trouble in the future. If Lehman Brothers and Bear Stearns can vanish overnight no financial institution is immune from insolvency. Already, I have reported on the financial troubles of both Saxo Bank and CMC markets in the last few months. But even taking into consideration the mass layoffs at both firms neither is likely to go belly up and take customer deposits with them.

In addition most of the U.S. based brokers on my list have had various regulatory actions taken against them (none of them however were charged with any financial violations and were related to marketing practices, which doesn’t interest me.)

I’m sure there are readers thinking to themselves, “that broker on your list is a crook and a cheat so how can you approve them?!” Simple, because those who feel one of these brokers has cheated them always has the option of filing a complaint with the appropriate regulator and have your day in court. But if you are trading with an unlicensed broker you’ll be lucky to even get a customer service agent on the phone to complain to in the first place let alone actually have an arbiter hear your case.

In short, I would feel comfortable opening an account with any of these brokers. Hence the reason they have been given “The Forex Savior Seal of Approval.”

 

Rather be smoking anything over accepting the propaganda your peddling!!

To answer your question “ Yes” after learning what a great job your US based regulators are doing” Yes I would prefer to stay far away from US based firms.

First of , It’s obvious to plenty what the US FX systems ( or should I say club) is doing, first get rid of the small players to limit invitations and competiveness’ and monopolize the game for an exclusive club then start to “put the disadvantages to the trader” and flees the “brained washed” who believe the propaganda your peddling.

I have spent long time in this game, long before the US joined in 99 and never ever had the issues I’ve seen until I started using US based firms. .

The US regulatory system is and has been scud for a long time, finally after this crises madoff , CDS, gov market manipulation the people are finally catching on.

Ill take my chances after all I’m I am a man and don’t need some wolf in sheep's clothing making sure I’m safe.

 

It's your funeral

 

ACM Throws in the Towel

ACM is officially closing their U.S. office and retreating back to Switzerland after failing to make any headway in the U.S. Of course the Savior has long suspected this Swiss broker wouldn’t last very long on this side of the pond in light of the increased capital requirements. Furthermore, I was right on the money in stating they clearly didn’t due their homework before opening an office here. The company was a registered NFA member for less than 12 months. What a wretched waste of money, time and man hours to set up an overseas office and then close it down in less than a year. This is not the sign of a company with a master plan. If they were publically traded I’d be shorting them with the intensity of a day trader dealing in shares of General Motors. Here is the official statement from ACM which you can find on the front page of their website: http://www.acmusa.com/

I love how these brokers close up shop and give their customers barely any notice before their positions are forcibly liquidated. One day you are trading with a long term strategy waiting for a position to retrace and the next your broker sticks a fork in your positions and blows up your account. And ACM celebrates this as a “Milestone,” to be ranked right up there with the invasion of Normandy and the first man landing on the moon perhaps. This is why it is so important for traders to make sure their broker is around for the long haul. And as the record shows, Swiss brokers are anything but safe long term bets.

We’ll be waiting to see if you get that bank license guys but as of now ACM is an unregulated Swiss broker and should be avoided until they once again submit themselves to real regulation.