Fresh from agreeing a settlement with FXCM's UK subsidiary, the CFTC has stepped up its campaign in the courts against "unregistered" RFEDs by announcing that it is bringing civil actions against another 11 foreign currency firms. As in their first such sweep a number of those firms are based in far away places such as Belize, the British Virgin Islands and Cyprus. However two names stand out in the CFTC's blacklist of miscreants as being more "onshore" than the others, namely:
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Last October we wondered what steps the CFTC would be able to take to enforce the new forex trading regulations that had just come into force, particularly when it came to pursuing offshore brokers in offshore courts. Back in January they sued a few brokers using the US courts. Now they have used a different approach, which still hasn't required the CFTC to state their case in a foreign jurisdiction. It seems all they need to do is to ask nicely for some money!
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Last week the NASDAQ listed TradeStation Group announced that:
With the launch of [its] new TradeStation Forex business, TradeStation will have transformed its forex offering from a fully disclosed operation, where it introduces customers to a third-party forex dealer, to one where its new subsidiary, TradeStation Forex, Inc., an approved Retail Foreign Exchange Dealer (RFED) and member of the NFA, acts as principal and directs aggregated pricing to its customers.
The third-party forex dealer referred to in the announcement is currently GAIN Capital, and TradeStation will shortly be cutting out that middleman and dealing directly with a number of liquidity providers. Retail forex traders will be able to use the recently introduced TradeStation 9.0 platform to access that liquidity, and the announcement also stated that:
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We've previously pondered how the CFTC might go about enforcing the new forex trading regulations that came into force last October, and now we know one of the tactics they are going to employ. Yesterday the CFTC issued a press release announcing that:
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The National Futures Association has just issued additional guidance to it's members about the CFTC's Final Forex Regulations. In its latest notice to members the NFA says that:
NFA staff has received a number of inquiries from Members seeking further guidance and clarification on certain requirements. Based on further consultation with CFTC staff on Friday, October 8th, this Notice provides additional guidance on the following areas:
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As we pointed out recently, the new CFTC regulations require all US spot forex brokers to use a much longer risk disclosure statement from October 18th 2010. As part of that risk disclosure:
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The CFTC final rules on the regulation of retail foreign exchange have now been officially published in the Federal Register. At the same time they have also authorized the NFA "to process and grant applications for initial registration, renewed registration and withdrawals of retail foreign exchange dealers (RFEDs) and their associated persons (APs)", effective from September 10th.
More on NFA Starts Registering Forex Brokers and "Solicitors"
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At long last the CFTC have revealed what changes they have in store for US retail forex traders. Their new regulations will come into effect on October 18th, and according to CFTC chairman Gary Gensler they:
More on CFTC Reduces Forex Leverage to 50 to 1 (Amongst Other Things!)
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When I started writing this blog in the Spring of 2009 I put forward the proposition that thanks to the advent of the internet and online retail forex brokers it had become possible for anyone possessing an entrepreneurial spirit, and prepared to put in the required effort over a number of years, to learn how to turn $1000 that they were willing and able to lose into a business that could support their family and themselves. I didn't say it was easy, but I did suggest it was possible. All that is about to change. It never was easy, and it looks like it's going to get ten times more difficult, for US citizens at least.
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