TraderNumber7
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If you are a U.S. based FX Retail Trader, then 2011 will be the last year that you will be able to hold and maintain a Non-U.S. FX Intermediary Account. Of course, you have your friendly government to thank for this mess and that piece of legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R. 4173 2010. What an oxymoron - "consumer protection." What consumer gets protected by this? They are treating Retail FX Traders as if they were all about 7 years old. This is not like 401ks, pension plans, retirement plans (qualified and unqualified), etc. This is nothing more than United States Government meddling in the affairs of its citizens and taking away both Freedoms and Personal Rights.
Basically, if you trade "Retail" you will be forced to trade inside the United States at a maximum of 50:1 leverage and with absolute no way to hedge your positions until a major pivot point on a trade that initially went against you.
These people know nothing about trading, yet they make laws that regulate it. They can't even get the math straight, failing to realize that an increase in cost basis per trade at 100:1 leverage, can net the same gain or loss as a specific decrease in cost basis at 50:1. Yet, they call themselves "protecting the consumer." This is no protection of the consumer. This is all about moving the Futures Markets back into vogue. They were losing dollars/revenue to the OTC FX market and whether individual Retail Traders win or lost all their money entirely, means absolutely nothing to either Dodd or Frank. It was the FCM Lobbyists who did this in America.
Here's the link to a good explanation of what just happened: http://www.investmentlawgroup.com/index.php?option=com_content&task=view&id=227&Itemid=127
Here's what someone could or might do:
1) Form a legal entity to conduct your trading business, whether you have a billion dollars to open an account somewhere or not. The point is that you should have been trading under legal business entity from the word go.
2) Make the legal entity either an LLC, LLP or Corporation registered in the nice state of Nevada. A stronghold for many business entities that belong to MANY United States Congressmen and Congresswomen (but, of course, they don't tell you this). Delaware, used to be a good state for this, but they have become lax over the years and more reciprocal with the Federal Government over the years. Or, create a foreign legal entity (limited liability company and/or corporate structure) and register that entity as doing business in the state of Nevada (establish a business address locally).
3) Open/establish a primary holding bank account of your legal entity with an foreign bank. Preferably, Swiss, but the Caymans, Bahamas, etc., works as well.
4) Open/establish a foreign FX Commercial or Institutional Trading Account - preferably with a foreign FX Intermediary that also happens to be a bank regulated outside the United States.
5) Create a small foreign charity or philanthropic NPO of your own selection having its "headquarters" outside the U.S. Then register that NPO as having a "presence" in the United States.
6) Open/establish a business account for the foreign NPO, here in the U.S., with you as the Founder/President/CEO [which will justify the compensation and benefits package paid to you each year]. If you list yourself as the "Janitor" and you net $1MM per year in total compensation, that won't fly. Unless you are the CEO of Waste Management, that certainly won't fly.
7) Establish a smaller personal bank account locally, here in the United States, from which you pay your normal and routine monthly expenses. Don't let hat account balance exceed $100k. When it does, open another personal bank account locally and repeat the process. Keep most of your trading capital inside the commercial/institutional trading accounts of the trading firm established above (where of course, you are Managing Director/Chief Trading Strategist/CFO/COO - as well as having CEO authority, or some title(s) like those).
NOTE: I am NOT an attorney and I am NOT giving legal advice. Seek legal advice from your attorney. I'm merely stating what someone could or might do. Not what someone should or would do.
-----------------------------
As Traders, we should all stick together. The powers that be don't care one wit about your "consumer protections." However, this one things is true about all politicians: The will NEVER write laws that hurt themselves, their families and most important (to them) those who fill their campaign coffers with money each election.
And, that is why there will always be a legal and ethical way around their attempts at sticking it to the so-called "little guy." You have a legal requirement to NOT break the law. However, as the new leader of your business concern, you NOW have a Fiduciary Responsibility to lower your costs and maximize your organizations profits. Just like the "big guys."
Good government is non-intrusive, supportive to the people, proficient and highly effective. Bad government does the EXACT opposite. Democrat, Republican, Independent - it matters not. The sooner the world wakes up and realizes this, the better off we will all be.
Take that CFTC.
Oh, I almost forgot:
To all of you so-called "Institutional FX Intermediaries" out there outside the U.S., pretending to "absolutely need" $1MM before you will open an account, you should seriously consider lowering your deposit requirements for Commercial and Institutional FX Trading Accounts, so you can take advantage of the new business that's coming your way.
As far as you U.S. based Retail FX Traders are concerned - 50:1 is lousy, sure, but zero hedging is absurdly ridiculous and antithetical to a good Trader's Tool Chest. Hedging IS a consumer protection, yet it was taken away by those feigning to be interested in protecting and preserving your capital. What a joke. They claim to protect you, yet they rob you of one tool that can prevent loss, until the market hits a strong pivot point from which you can recover and in some cases, even go on to make a profit off of what would have been a naked loss.
What bunch of regulatory fools they turned out to be with respect to Retail FX. Knowing nothing, helping no retail trader and creating a legal gauntlet that now everyone has to circumnavigate. Yep, that made a whole lot of sense.
Basically, if you trade "Retail" you will be forced to trade inside the United States at a maximum of 50:1 leverage and with absolute no way to hedge your positions until a major pivot point on a trade that initially went against you.
These people know nothing about trading, yet they make laws that regulate it. They can't even get the math straight, failing to realize that an increase in cost basis per trade at 100:1 leverage, can net the same gain or loss as a specific decrease in cost basis at 50:1. Yet, they call themselves "protecting the consumer." This is no protection of the consumer. This is all about moving the Futures Markets back into vogue. They were losing dollars/revenue to the OTC FX market and whether individual Retail Traders win or lost all their money entirely, means absolutely nothing to either Dodd or Frank. It was the FCM Lobbyists who did this in America.
Here's the link to a good explanation of what just happened: http://www.investmentlawgroup.com/index.php?option=com_content&task=view&id=227&Itemid=127
Here's what someone could or might do:
1) Form a legal entity to conduct your trading business, whether you have a billion dollars to open an account somewhere or not. The point is that you should have been trading under legal business entity from the word go.
2) Make the legal entity either an LLC, LLP or Corporation registered in the nice state of Nevada. A stronghold for many business entities that belong to MANY United States Congressmen and Congresswomen (but, of course, they don't tell you this). Delaware, used to be a good state for this, but they have become lax over the years and more reciprocal with the Federal Government over the years. Or, create a foreign legal entity (limited liability company and/or corporate structure) and register that entity as doing business in the state of Nevada (establish a business address locally).
3) Open/establish a primary holding bank account of your legal entity with an foreign bank. Preferably, Swiss, but the Caymans, Bahamas, etc., works as well.
4) Open/establish a foreign FX Commercial or Institutional Trading Account - preferably with a foreign FX Intermediary that also happens to be a bank regulated outside the United States.
5) Create a small foreign charity or philanthropic NPO of your own selection having its "headquarters" outside the U.S. Then register that NPO as having a "presence" in the United States.
6) Open/establish a business account for the foreign NPO, here in the U.S., with you as the Founder/President/CEO [which will justify the compensation and benefits package paid to you each year]. If you list yourself as the "Janitor" and you net $1MM per year in total compensation, that won't fly. Unless you are the CEO of Waste Management, that certainly won't fly.
7) Establish a smaller personal bank account locally, here in the United States, from which you pay your normal and routine monthly expenses. Don't let hat account balance exceed $100k. When it does, open another personal bank account locally and repeat the process. Keep most of your trading capital inside the commercial/institutional trading accounts of the trading firm established above (where of course, you are Managing Director/Chief Trading Strategist/CFO/COO - as well as having CEO authority, or some title(s) like those).
NOTE: I am NOT an attorney and I am NOT giving legal advice. Seek legal advice from your attorney. I'm merely stating what someone could or might do. Not what someone should or would do.
-----------------------------
As Traders, we should all stick together. The powers that be don't care one wit about your "consumer protections." However, this one things is true about all politicians: The will NEVER write laws that hurt themselves, their families and most important (to them) those who fill their campaign coffers with money each election.
And, that is why there will always be a legal and ethical way around their attempts at sticking it to the so-called "little guy." You have a legal requirement to NOT break the law. However, as the new leader of your business concern, you NOW have a Fiduciary Responsibility to lower your costs and maximize your organizations profits. Just like the "big guys."
Good government is non-intrusive, supportive to the people, proficient and highly effective. Bad government does the EXACT opposite. Democrat, Republican, Independent - it matters not. The sooner the world wakes up and realizes this, the better off we will all be.
Take that CFTC.
Oh, I almost forgot:
To all of you so-called "Institutional FX Intermediaries" out there outside the U.S., pretending to "absolutely need" $1MM before you will open an account, you should seriously consider lowering your deposit requirements for Commercial and Institutional FX Trading Accounts, so you can take advantage of the new business that's coming your way.
As far as you U.S. based Retail FX Traders are concerned - 50:1 is lousy, sure, but zero hedging is absurdly ridiculous and antithetical to a good Trader's Tool Chest. Hedging IS a consumer protection, yet it was taken away by those feigning to be interested in protecting and preserving your capital. What a joke. They claim to protect you, yet they rob you of one tool that can prevent loss, until the market hits a strong pivot point from which you can recover and in some cases, even go on to make a profit off of what would have been a naked loss.
What bunch of regulatory fools they turned out to be with respect to Retail FX. Knowing nothing, helping no retail trader and creating a legal gauntlet that now everyone has to circumnavigate. Yep, that made a whole lot of sense.
