NFA Dead Forex Firms Walking


Active member
150 4

Has anyone been trading in this the past few days?

Some pretty big swings.

And why does it seem at the start that im -£ a few in a trade the first 1-3 seconds? Is that what IGIndex charges me or something? For the stop-loss?

(I have a limited risk account)


Established member
524 38
Yes - it's probably the extra spread you pay for their guaranteed stop. And the fact that you paid offer, and would have to hit the bid to close - you're losing the spread whether you have a stop or not.


Junior member
13 1
NFA Notice to Members I-09-07 February 26, 2009

Effective Date of NFA Forex Requirements

NFA has received notice that the Commodity Futures Trading Commission has approved amendments to existing NFA forex requirements as well as a new compliance rule regarding forex customer statements. The amendments and new rules will become effective as set forth below.

Hypothetical Performance, Weekly Reports, Rollover Charges, and Managing Customer Accounts: Effective April 1, 2009

Effective April 1, 2009, NFA Compliance Rule 2-36(i) will make clear that if a Member uses hypothetical results in forex promotional material it must comply with NFA Compliance Rule 2-29(c) and the related Interpretive Notice. Although the detailed requirements regarding hypothetical performance results do not become effective until April 1, Members are reminded that using hypothetical forex performance in a misleading manner has always violated NFA Compliance Rule 2-36.

As of April 1, the forex weekly reports must be submitted by a supervisory employee who is, or is under the ultimate supervision of, a listed principal who is also an NFA Associate. Section 13 already requires, and will continue to require, that the person filing the report have authority to bind the firm.

Also effective April 1, Forex Dealer Members ("FDMs") and their Associates are expressly prohibited from exercising trading authority over customer accounts for which the FDM acts as counterparty. The Interpretive Notice does not prohibit FDMs and their Associates from exercising discretion over customer accounts if another FDM is the counterparty.

Finally, as of April 1, an FDM must have a written policy detailing the procedures used to calculate rollover charges and payments. The Interpretive Notice does not dictate the calculation the FDM must use, nor does it require the FDM to use the same calculation in all market conditions. The procedures must, however, set forth the factors that the FDM takes into consideration when calculating the rollover charge, as well as the sources for such factors. The FDM must maintain the documentation of the underlying factors it looked at in calculating the charge so NFA can replicate the calculation during an audit.

Forex Customer Statements - New NFA Compliance Rule 2-44: Effective June 1, 2009

New NFA Compliance Rule 2-44, which becomes effective on June 1, 2009, describes the information that must be included in FDM confirmations and monthly statements. In addition to initiating and liquidating transactions, Compliance Rule 2-44 requires confirmations for rollovers and any adjustments to an account, including those that debit or credit the account rather than changing the price. The rule also requires that the monthly statement show all transactions for both forex options and non-options contracts, even if the position is closed by the end of the month. Rollovers do not have to be included on the monthly statement.

Compliance Rule 2-44 also requires FDMs to provide readily accessible daily statements that include the account equity in a customer's account. Compliance Rule 2-44 permits an FDM to meet its delivery requirements for confirmations and monthly statements by providing on-line access where the customer consents to that method.

The Supervision of the Use of Electronic Trading Systems: Effective June 1, 2009

The amendments to the Interpretive Notice to Compliance Rule 2-36(e) regarding Supervision of the Use of Electronic Trading Systems will also become effective on June 1, 2009. These amendments require each FDM to:

* notify NFA of the trading platform(s) it uses and of the owner of each platform;

* audit the trading system annually, with the initial and biannual audits conducted by an outside party;

* notify NFA as soon as reasonable, but no more than twenty-four hours, after it experiences operational difficulties with its trading platform;

* provide advance disclosure (when an account is opened and on the FDM's web site) of the factors that might affect the system's performance and an alternative means of contacting the FDM during system outages or slow-downs;

* provide customers with relevant time and sales information (upon request);

* provide customers with year-end reports showing realized profits and losses incurred during the year and unrealized profits and loses on open positions as of the end of the year;

* produce to NFA, upon request, a sortable report showing monthly and yearly realized and unrealized losses by customer; and

* maintain written procedures describing how settlement prices will be set using objective criteria.

Copies of the amendments and new Compliance Rule 2-44 can be viewed in NFA's submission letters to the CFTC. The rule submission letters contain more detailed explanations of the changes, and you can access electronic copies of those letters at,, and

Questions concerning these changes should be directed to Sharon Pendleton, Director, Compliance ([email protected] or 312-781-1401) or Lauren Brinati, Senior Manager, Compliance ([email protected] or 312-781-1215
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forex scholar

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239 9
NFA Strikes Again

Just when you thought $20 million would be the final line of demarcation for U.S. based forex brokers the National Futures Association has announced that capital requirements will be going even higher:

Subsection (a)(ii) applies to Forex Dealer Members that execute any customer transactions other than by using straight-through processing and that also have liabilities to customers of more than $10 million. Where it applies, the Member’s capital requirement is the minimum capital required by subsection (a)(i) plus 5% of the liabilities over $10 million.

For example, if the minimum capital requirement is $20 million, a Forex Dealer Member that operates a dealing desk and has $208 million in liabilities to customers would be required to maintain adjusted net capital equal to or in excess of $29.9 million.

Forex Dealer Members with over $10 million in customer liabilities are subject to this alternative requirement unless they execute all customer transactions using straight-through processing. Straight-through processing refers to platforms that automatically (without human intervention and without exception) enter into an identical but opposite transaction with another counterparty, creating an offsetting position in the Forex Dealer Member’s own name. A Forex Dealer Member that offers several platforms will be exempt from this requirement only if each platform executes all customer orders using straight-through-processing.

Wow. So unless a forex firm hands off every trade to a bank they have to pay this whopping 5% tax on their customer liabilities. Only a handful of firms offer STP execution. It appears the NFA is trying to encourage more firms to go in that direction.


Junior member
44 4
Hmmm....likely course of action if this does pass will be, I'm guessing, the FCM's pass off any extra portion of risk above comfort level to their banks and share the riskbook P/L, so not parring off the trade direct but running the book remotely through their chosen custodian.

It's not an ideal solution and for sure it slows any potential profits to be had on any excess risk held but at least they could still stay well within the limits without sticking in any more capital.

Makes sense?.

forex scholar

Active member
239 9
Breaking News: Crown Forex to be Liquidated

The dangers of trading in Switzerland were revealed once again as Crown Forex is to be shuttered according to Francesc over at FX Street:

Francesc’s Weblog Update - FINMA Decision on Crown Forex is to liquidate but not yet effective

Crown was an unregulated Swiss broker and thus their demise is certainly not a surprise. This is always the chance customers take when they open an account with an unregulated broker. Nevertheless, traders need to beware trading with any Swiss brokers unless they have a banking license. Let the corpse of Crown Forex be all the proof you need.

forex scholar

Active member
239 9
Crown Forex - An Autopsy

Now that Swiss Regulators have pulled the sheet up over Crown Forex’s rigamortis racked cadaver it is time to ascertain the cause of death. Was it fraud? Was it incompetent management? Was it a complete lack of regulatory oversight? Was it a faulty business model? Or was it all of the above?

A good place to start is a thread that was started over at FX Fisherman by a former customer of Crown Forex in March of 2007, back when Crown Forex was strutting through the snow capped valleys of Switzerland with the cocky assurance that they had the world in the palm of their hand.

Crown Forex - Don't believe the 1 pip spread lure - Forex Trading | MetaTrader Indicators and Expert Advisors

Been trading on Crown Forex for some time now, and sure enough, discovered that the old adage "if if it too good to be true, it probably isn't" holds true once again.

The Lure: One pip spreads on all 7 majors

The Bait: Demo trading with near perfect execution ('made' 125k just messing around on demo one session, when the price was bouncing about 15 pips either way.. and trading 100 lot orders)

The Hook: Far from instant execution.. and even the worst requote system I have seen in my limited broker experience (4 different ones).

The Reel: Even during relatively 'slow' markets, my RFQ (request for quote) would take upwards of 10 to 15 SECONDS before execution. Mind you, this is when the price wasn't moving AT ALL. No, the dealers would sometimes just wait to see if it moved against my request, and fill... or, in my direction, and requote!! Did you hear that? Wait FIFTEEN seconds when the price was stagnant to see which way it would move. If it moved FOR me, requote. If against, instant fill (before I could cancel... which they wouldn't always allow anyway, in keeping with the above scam)

The Net: Even if at times I would accept the requote, if the market was still moving IN THE DIRECTION I anticipated, I would get subsequent requotes... and again, each time it could literally take 5 or more seconds to 'see' if the market was continuing in my direction. For those of you not understanding the implications, allow me to boil it down. The supposed ONE pip spread in effect at times became 7, 8, 10 or MORE pips!!

In the Boat: I even have a screen shot of a requote where they are offering a price TWO pips above even the current market price. Wow, how gullible do those dealers think I am?

Flopping on the bottom of the boat, gasping for air: This may be a naive revelation... many may already suspect or know this to be fact. No matter. My conclusion of this all leads me to believe this: Crown Forex, and I am sure many others out there, are not dealing off your position. Meaning, when you buy, they aren't selling at the same time. And vice versa. No, since 80 to 90% or more of forex traders quit, go bust, or give a substantial amount of money to the market, I am convinced that the dealers are taking the other side of your position, assuming you don't know what you are doing and won't last long any way. Does any one else here see a conflict of interest? Seems to me, your dealer should be on your side, trying to keep you in the game, because in theory they SHOULD be making their money on the spread, high volume, and obviously longtime customers. In fact, I am convinced, that is not the case. They are not on our side, "working" for us so to speak (remember, spot Forex dealing is very competitive, so let's not forget who the CUSTOMER is!); in fact, quite the opposite.

Our only retaliation? Hurt their business by informing the community of forex traders, thereby reducing the lure of "one pip spread" to the scam that it is. You are better off finding yourself a dealer with quick fills of 2 to 3 pips, than to open an account with Crown Forex, as their spreads effectively are much, much larger than this.

Any firm that is promising a guaranteed one point spread should automatically be written off for suspicion of fraud. It just isn’t possible in the forex market. Something has to give. And in Crown Forex’s case they reneged on their promise by constantly requoting their customers and refusing to allow them to deal on their phantom one point spreads.

But this wasn’t the only fraudulent marketing tactic of Crown Forex. Go to their own website and you can see a variety of bogus promises, such as, “Secured Funds.” Secured Funds? This is a company that hasn’t allowed it customers to withdraw their funds for months! If that is security I hate to see what their idea of “non-secured” funds is.

So in determining cause of death it does appear fraud is one likely cause. But another likely cause is incompetent management and employing a faulty business model. If you are serious about being a long-term forex dealer you simply don’t operate without a legitimate license. Yet, Crown Forex set up its base of operations in the notorious Swiss forex market, which over the years has become a haven for fraud and corporate malfeasance. They were never subject to audits, capital requirements or basic financial standards that other brokers around the world are subject too. This allowed their management team to get sloppy and cut corners, which they are now paying dearly for.

In the end Crown Forex got what it deserved. Sadly, too many innocent customers are being hurt in the process. Once again, traders should beware trading with any firm that doesn’t have a license. In Switzerland, that means a banking license for anyone offering forex. Not a pending license, or a pending application, but AN ACTUAL LICENSE. And right now there are no major Swiss brokers who have actually gotten a banking license to date.

forex scholar

Active member
239 9
January Net Capital Report

The CFTC has just released their latest net capital figures. AMIFX saw its net capital double. And with their new website it looks like they have gotten an injection of cash from somewhere. Forex Club’s net capital also jumped by over 50%. Our final pool of contestants is beginning to take shape.

The following firms have net capital below $20 million

MB Trading $15,227,000
Easy Forex $15,544,000
GFS Forex $15,957,000
I Trade FX $16,088,000
Ikkon Royal $16,548,000
Alpari $19,690,000
Advanced Markets $19,873,000

The following firms have net capital above $20 million

Forex Club $22,409,000
PFG $26,005,000
CMS Forex $29,255,000
Interbank FX $39,945,000
FX Solutions $43,785,000
GFT Forex $76,055,000
FXCM $98,456,000
Gain Capital $107,390,000
Oanda $169,501,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new $20 million capital requirement going into effect in the months ahead.


4 0
Now that we have the numbers on the about the banks that hold customer deposits LOL..I use FXCM, and though they have a nice amount of capital, I'm a bit concerned that my money is held by Bank of America!
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Junior member
13 1
NFA takes an emergency enforcement action against GlobeFX Club, Inc.

March 24, Chicago - National Futures Association (NFA) announced today that it has taken an emergency enforcement action against GlobeFX Club, Inc. (GlobeFX Club), a Commodity Pool Operator located in Homestead, Florida. Effective immediately, the Member Responsibility Action (MRA) is deemed necessary to protect pool participants, customers and other NFA Members because GlobeFX Club has provided contradictory information in regards to whether it is conducting business, has customer accounts and is operating a pool. NFA has been unable to determine the nature of GlobeFX Club's business, the identities of its customers, the treatment of customer funds and the identity of two individuals who purportedly loaned money to the firm. The firm has also failed to produce books and records requested by NFA and answer questions concerning its operations.

The MRA suspends GlobeFX Club from NFA membership until further notice. GlobeFX Club is prohibited from soliciting or accepting any customer or pool participant funds or placing trades for any pool that its operates or customer accounts that it holds. Additionally, the MRA prohibits GlobeFX Club from disbursing or transferring any funds from any accounts without prior NFA approval.

The MRA will remain in effect until GlobeFX Club has demonstrated that it is in complete compliance with all NFA requirements. GlobeFX Club may request a prompt hearing before NFA's Hearing Committee.

The complete text of the MRA can be found on NFA's Website (National Futures Association - NFA is a regulatory service provider for the derivatives markets).

forex scholar

Active member
239 9
Police Raid ACM

Disturbing news out of, where else; Switzerland, that the police have raided the offices of Swiss forex broker ACM for possible fraud. You’ll remember ACM fled the U.S. after they failed to come up with enough capital to stay in business. They are trying to get a banking license in Switzerland but to date only have an application pending with Swiss authorities. That application just got a lot more complicated.

Francesc at FX Street has been linking to several articles in the Swiss Press which details the investigation:
Francesc’s Weblog Police raid ACM Geneva office in a suspected financial fraud case

The main article appeared in Swisster:
Swiss Business in English: Police raid Geneva forex firm in fraud probe

A squad of 28 police officers raided the downtown Geneva offices of currency trading company ACM and seized documents, a computer and other evidence in a suspected financial fraud case. Swisster discovers the unprecedented affair, being directed by an inspector and detective for the cantonal force’s financial fraud brigade, may take weeks to unravel and has involved the questioning of top officials from the company, who are refusing to comment.

28 police officers?! Sounds like the raid that took place at the end of the movie Boiler Room where a swarm of agents falls upon Vin Diesel and company.

In addition, senior officials were questioned by police, although Pulh said no-one has been arrested. A company employee told Swisster that a trader and four of the company’s senior management, including Nicholas Bang, deputy general manager and one of ACM’s founders, were contacted at their homes early Thursday and taken in for questioning.

“We are being told that it has to do with a client from two years ago based in Mexico who had lost a lot of money from the company,” the informant said. “The client was looking for documents to see if there was any misappropriation.”

ACM has countered that this mysterious Mexican plaintiff is just making it all up:
Francesc’s Weblog ACM Update 1 - ACM feels being victim to former client malicious intent

On Thursday the 2nd of April, on the basis of counterfeit documents produced by a former client, the authorities in Geneva visited ACM’s offices.

Collaborating in a transparent and active way, ACM delivered all information required.
All elements prove ACM’s good faith and it remains clear that the company has fallen victim to a former client bent on malicious intent.

In return, ACM has lodged a complaint against this former client with accusations of blackmail, defamation and forgery of documents.

Another newspaper article that Francesc links to then goes on to explain that the Mexican plaintiff was tipped off by an ex-ACM employee about some bad pricing or something from the summer of 2008. ACM insists this rogue employee gave the Mexicans false statements which the plaintiff then used to blackmail ACM?

Francesc’s Weblog ACM Update 2 - Probes used in the accusation of fraud to be falsified according to ACM

What a mess. Not sure who to believe here. But I can’t imagine that 28 police officers would storm a business, seize computers and files, and interrogate management- all on the hearsay of one disgruntled foreigner.

Stay tuned, we may have another Crown Forex on our hands.

I’ve said it before, I’ll say it again, do not trade with a Swiss broker UNLESS they have a banking license!

forex scholar

Active member
239 9
February Net Capital Report

The CFTC has just released their latest net capital figures. For the most part it is the same as last month’s report.

The following firms have net capital below $20 million

Easy Forex $15,267,000
MB Trading $15,449,000
GFS Forex $16,008,000
Ikkon Royal $16,310,000
I Trade FX $16,811,000
Alpari $19,563,000
Advanced Markets $19,779,000

The following firms have net capital above $20 million

Forex Club $21,536,000
PFG $26,053,000
CMS Forex $29,132,000
Interbank FX $37,816,000
FX Solutions $49,298,000
GFT Forex $84,505,000
FXCM $101,546,000
Gain Capital $105,049,000
Oanda $169,205,000

As always conduct your due diligence and make sure the firm you are trading with will be able to comply with the new $20 million capital requirement going into effect in the months ahead.
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