Proposed NFA Capital Requirement - page 29
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Here We Go Again
Well it appears the NFA is not done with its capital increase crusade. They are pushing hard in the Congress to increase the minimum capital requirement to $20 million and it appears they have succeeded. The Congress has passed legislation to do just that:
Forex Street Weblog: New bill means though times for retail FDM's
When such a new rule would become law is unclear. But it looks like we'll have to go through this whole capital requirement ordeal again...
Who Has What
With Congress set to increase capital requirements to $20 million and with the NFA having previously narrowed down the list of U.S. Brokers to 24 I thought it helpful to post the numbers for the remaining brokers in business so everyone knows where the industry is at in the here and now:
According to the latest CFTC Report:
Financial Data for FCMs
Advanced Markets $1.3 million
Alpari $6.4 million
Bacera $3.1 million
CMC $2.7 million
CMS $11.4 million
Easy Forex $7 million
Forex Club $4.8 million
Friedberg Mercantile $7.9 million
FX Solutions $26.9 million
FXCM $75 million
Gain Capital $50 million
GFS Futures & Forex $3.6 million
GFT $57 million
Hotspot $6.1 million
I Trade FX $23.8 million
IFX $17.1 million
Ikon $9.1 million
Interbank FX $30 million
MB Trading $6.6 million
Money Garden $5.3 million
Oanda $159 million
ODL $13 million
PFG $12.8 million
RJ O'Brien $91 million
FXLQ Hearing Cancelled
The FXLQ Hearing has been deemed unnecessary and a preliminary injunction has been declared. In effect, this means that funds will be frozen indefinitely while things proceed throught the legal system. I have written the CFTC and requested consideration be given to releasing FXLQ customer account funds in order not to add additional hardship. I suggest all who have funds with FXLQ do the same. Best wishes.
NFA Fines AMIFX
Advanced Markets just got nailed for shoddy book keeping. Here is the the NFA's official statement:
NFA fines Charlotte forex firm, Advanced Markets, Inc., and its principals $150,000
January 30, Chicago - National Futures Association (NFA) has ordered Advanced Markets, Inc. (AMI) and its principals, Anthony P. Brocco and Geoffrey Gooch, to jointly pay a fine of $150,000. AMI is a Futures Commission Merchant and a Forex Dealer Member located in Charlotte, North Carolina. The Decision, issued by an NFA Hearing Panel, is based on a Complaint filed in June 2007 and a settlement offer submitted by AMI, Brocco and Gooch.
The Panel found that Brocco and Gooch failed to diligently supervise the firm's financial and recordkeeping activities and the promotional materials used by AMI's unregistered solicitors.
FXLQ disposition of funds.
Following my letter to the CFTC requesting consideration be given releasing FXLQ client funds, I received the following reply:
"...We are certainly mindful of your concerns and those voiced by the many other affected customers, and we believe the receiver is also mindful of the dilemma the asset freeze poses for customers and will take that into consideration in connection with any recommendations to the Court.
We expect that the Receiver’s interim report should be posted on the Receiver’s website either by Feb. 4th, or by the following Monday Feb. 7th."
Since only the court is authorized to actually order the release or distribution of FXLQ customer funds, we can hope that there will be some kind of tangible recommendtion contained in the Receivers Interim Report scheduled for Feb. 4 so keep the letters to the CFTC and Receiver rolling in.
The $20 Million Guillotine
Should the Congress pass legislation requiring all firms have a minimum net capital requirement of $20 million the following firms will be in danger in the United States:
Advanced Markets $1.3 million
Alpari $6.4 million
Bacera $3.1 million
CMC $2.7 million
CMS $11.4 million
Easy Forex $7 million
Forex Club $4.8 million
Friedberg Mercantile $7.9 million
GFS Futures & Forex $3.6 million
Hotspot $6.1 million
IFX $17.1 million
Ikon $9.1 million
MB Trading $6.6 million
Money Garden $5.3 million
ODL $13 million
PFG $12.8 million
Now, many of these firms have additional capital they can infuse into their firms (particularly foreign firms like IFX and CMC as well as domestic ones like Hotspot.) But many do not. The customers of these firms should take notice, and if you want to keep trading with these firms, take action.