Many questions remain regarding trading offshore to evade leverage and other constraints posed by the new CFTC rules.
It seems these new rules will put a stop to Americans trading retail forex offshore to evade CFTC rules.
How can FDMs make many changes in their registration by Oct. 18, the implementation date for the new CFTC rules?
Trade on CFTC-sanctioned foreign OTC platforms respecting CFTC rules on LIFO and perhaps 10:1 leverage or take their chances in offshore tax havens.
Some Americans insist on keeping a foreign broker to retain 200:1 leverage and spread betting, rather than succumb to CFTC rules capping leverage at 50:1 on majors and 20:1 on minors plus FIFO.
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Registered as an Exempt Board of Trade (EBOT) for swaps and other OTC cleared derivatives, TeraExchange intends to apply to become a Swaps Execution Facility (SEF) once SEC and CFTC rules are finalized in early 2012.
The CFTC and NFA are scrutinizing forex brokers more now after their Oct. 18, 2010 effective date for RFED registrations in accordance with their new CFTC rules for forex transactions, sanctioned by Dodd-Frank Fin Reg too.
To spring a prohibition on foreign financial institutions offering forex trading to U.S. customers as of Oct. 18, 2010 (the effective date of the new CFTC rules) would be extremely undiplomatic on a global country-by-country dealing basis.
Some forex brokers in the U.K. and other jurisdictions may register with the NFA as RFEDs and then continue to offer money protection in the UK, although they will still need to adhere to the new CFTC rules on leverage and more.
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Gaining an extra 270 days to trade on a non-registered foreign bank platform can help many retail forex traders who are not otherwise ready to begin trading under the new CFTC rules, which include 50:1 margin on majors, 20:1 margin on minors, the hedging rule and no FDIC, SPIC or segregation protection.
Last week, we continued our series of podcasts on the new CFTC forex rules.
The decision came as part of the Dodd-Frank act which mandated that the CFTC write rules to regulate the swaps, or over-the-counter market, in addition to their oversight of the futures market.
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They have been co-hosts on our series of podcasts covering these new CFTC forex trading rules.
Keep in mind that this court case occurred before the new CFTC forex brokerage rules went into effect on Oct. 18, 2010.
On April 10, 2013, the SEC and the CFTC jointly adopted rules requiring covered entities to adopt programs to detect red flags and prevent identity theft.
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We abide by all regulations mandated by the CFTC and the rules of NFA to hold customer funds in segregated accounts that are always separate from operational funds.
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The new regulation is a part of the Dodd-Frank financial reform act, under which the Commodity Futures Trading Commission (CFTC) proposed rules for how OTC derivatives clearing houses should be regulated.
The SEC and CFTC have each proposed rules for a new type of trading venue known as a swap-execution facility that is designed to increase market transparency.
According to the forex dealer executive I spoke with, the NFA plans to issue a notice to members perhaps today or in a few days to clarify DF and the new CFTC retail forex trading rules, mostly for implementation issues.
Will American forex traders be able to continue using foreign trading platforms to escape the reach of Fin Reg and the CFTC (including these new rules)?
The CFTC said it expects to publish these rules no later than six months from the missed deadline.
The attorney and author of this article said to me via email: I spoke with an attorney at the CFTC Monday who is dealing with these rules.
Celent released its report last week, as foreign regulators warned the U.S. Commodity Futures Trading Commission (CFTC) that its proposed new derivatives rules could brutalize global markets.
The comment period on the CFTC proposals published in January expired and I expect rules to be published soon.
Both the SEC and the CFTC have been charged with writing and implementing numerous new rules and regulations.
Nothing in these CFTC documents specifically exempts offshore forex platforms or brokers from these new rules, either.
Rules for clearing swaps are still being written and the CFTC has pushed back the deadline to have swaps move to central counterparty clearing to Dec. 31 from the original deadline of July 16.
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Notice how the CFTC may not allow Americans to get higher leverage offshore with new forex trading rules. (See my past blogs and podcasts.) Could regulators and tax authorities use extraterritorial reach on an FTT too?
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An advisory committee on regulatory issues has been asked by the SEC and CFTC to submit recommendations later this month on how to modernise market structure and trading rules.
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