Hi everybody

As you were already aware, I´m planning to send an open letter to CEO’s of those brokerage firms that are currently advertising themselves on FXstreet.com. My goal is to contact CEO’s at FXDD, ITradeFX, FXClub and MG Forex to ask them their vision and how their companies are going to adjust themselves to new NFA’s requirements.

I put the letter on hold as I wanted Toni Juste to check it and to give me his view about it before sending it away. He is currently on vacation but he made the mistake to take the laptop with him, so he already sent me his feed-back so there is no point to hold it any further.

As soon as this post will be online, I´ll send the letter to all companies affected and as soon as I get their feed-back I´ll post it here.

Francesc

Open letter to FXstreet’s clients affected by NFA capital requirement changes

Dear — CEO

FXstreet.com is closely following developments in the US after the NFA proposed capital requirement changes for the FX brokerage firms. The FX community fears that such new rules could potentially wipe out 90% of the existing firms and that a lot of the retail money held by such firms may not be withdrawn.

As your already know, the NFA wants to raise capital requirements for all registered Forex Dealer Members (FDM) to $5 million. Further, improved accounting standards would be required. With that new measure, the NFA hopes the increased standards will prevent the ongoing problem of forex brokerages going bankrupt and/or committing fraud and most clients losing all or almost of their accounts’ deposits.

As stated in the last financial data report for FCM’s published last June 30 th at the CFTC’s web site (http://www.cftc.gov/files/tm/fcm/tmfcmdata0706.pdf ), your company should be affected by the new capital requirement because it currently is below $5 million.

Since your company is currently advertising on our site and your firm is included in our list of  World FX Brokers, we think our obligation is to come to you for some answers to the most frequently asked questions our visitors are placing us the last few weeks.

Could you please be so kind to answer the following questions?

Your answers will be published on my blog at FXstreet.com

http://weblog.fxstreet.com   

and on FXstreet.com website.

1. NFA is expected to raise soon capital requirements to Forex brokers.

- How are you adapting to the new NFA requirements?

- Does your company hold more assets than those belonging exclusively to clients’ deposits?

- Are client’s funds segregated from the firm’s own capital? Are they used in any way by the firm?

2.   - In case that you don’t meet the new financial requirements, what are you planning to do?

- In case you had to fill for bankruptcy, are your customers aware of that possibility at this time? Will they be protected?

- Can you guarantee your customers that in case of bankruptcy each and every on of them will be able to withdraw all his/her funds?

- How long could it take for a customer to withdraw the funds in his/her account in case you were filling for bankruptcy?

3. For many, the very business model of Forex brokerage firms that needs to be decided is whether or not such brokerage houses can take opposite trading positions to those held by their customers, ie, trading ‘against them’, which contradicts traders’ well-being. What is your company’s position on this? Is your firm currently taking the other side of customers’ position/trade?

Your feedback to this e-mail will be posted at my personal blog:

http://forex.typepad.com/fxstreet/

If it was possible, I would like to receive your response before September 1st 2007.

Thanks

All the best

Francesc

Francesc Riverola
Chief Executive Officer
FXstreet.com
FOREXSTREET SL