How the CFTC rulings affect American Fx traders

[The Aslan Group]

I remember as a young boy being quite envious of Americans; nice weather, the best TV shows and a Disney theme park on each coast, how couldn't you be jealous! Fast forward 30 years and that envy has all but disappeared as many American forex traders find themselves facing some very difficult decisions.

Since the CFTC ruling on Aug. 30th we have been inundated with questions from American clients looking for some direction and/or needing to "vent" about the impact this announcement will have on their trading.

I understand that emotions are running high and we have heard opinions from those who think these rules are a positive development and those who believe they're having their freedom stripped from them under the banner of protection ( the vast majority believing the latter ).

With that being said, the purpose of this post isn't to discuss the "fairness" of this ruling but instead to discuss the reality of the situation for the American forex trader...whether you or I like the ruling or not, there's no changing the fact that it's coming into effect on October 18th.

The policies of the individual brokers seem to be subject to their own interpretation of the ruling. As of today ( Sept. 29th ) both FXCM and Forex.com have confirmed that their American clients will be required to “repatriate” accounts from their UK division back to the US by the 18th of October.

For some traders this is not a big deal as they don’t hedge, nor do they require more than 50:1 to leverage. For others however, this severely impedes their trading and they are looking for alternatives.

So what should you expect?

If you currently trade with an NFA registered broker then the only difference you will notice is the leverage reduction from 100:1 to 50:1 ( 20:1 on “exotic” pairs ).

If you trade with the foreign division on an American broker, then get in touch with their customer service department and find out whether you will be required to move your account to the US ( as I mentioned, both FXCM and Forex.com will be requiring this but others are still undecided ).

If you currently trade with a foreign broker, then find out whether they will continue their dealings with clients from the US.

If you find yourself looking for a new broker regulated in a reputable jurisdiction outside of the US, that will still accept American clients, then there are still options available.

We have spoken to all of our partner brokers since the announcement and the following four have expressed their commitment to continue dealing with American traders.


MIG Bank
Tadawul Fx
Dukascopy


You can find more information on each of these brokers along with details of available rebates and account opening instructions by clicking the links below.



MIG Bank

Tadawul Fx

Dukascopy

One thing I have learned over the years, is that in this industry “change is imminent”. There is no guarantee that these brokers won’t amend their policy regarding American clients at some point down the road, but each seemed quite confident that there would be no changes in the immediate future.

Please feel free to send me a PM with any questions or if you need any assistance in opening an account.

Best Regards,

Gavin

*** Edit *** As of Oct. 4th 2010, Go Markets has been removed from the list as they are not currently accepting US client applications. I'll let you know if anything changes