Forex Street Weblog

CFTC approves approves changes requested by the NFA

Notice I-07-39

September 28, 2007

Effective Date of Amendments to NFA Financial Requirements Section 11 and the Interpretive Notice Entitled "Forex Transactions"

NFA has received notice that the Commodity Futures Trading Commission has approved changes to NFA Financial Requirements Section 11 and the Interpretive Notice entitled "Forex Transactions." The amendments increase the minimum net capital requirement for Forex Dealer Members (FDMs) to $5,000,000. They also eliminate the concentration charge and replace it with restrictions on the types of firms with which an FDM may maintain assets and cover its exposure for purposes of CFTC Regulation 1.17. These changes will become effective on December 21, 2007.

A Forex Dealer Member must have $5 million in adjusted net capital as of December 21, 2007. This increase also raises to $10 million the amount of capital required for a security deposit exemption under NFA Financial Requirements Section 12(b). Since this is a significant change to the qualifications for the exemption, Members that are currently operating under Section 12(b) should notify NFA's Compliance Department whether they intend to continue using the exemption.

As noted above, the changes eliminate the concentration charge and replace it with restrictions on the types of firms with which an FDM may maintain assets and cover its exposure for purposes of CFTC Regulation 1.17. In particular, an FDM may not include assets held by an unregulated person or an affiliate in its current assets for purposes of determining its adjusted net capital, and it may not use positions entered into with an unregulated person or an affiliate to cover its exposure for purposes of avoiding the haircuts imposed by CFTC Regulation 1.17. In general, a firm is unregulated unless it is a U.S. bank; a FINRA-member broker-dealer; an NFA-Member FCM; a state regulated insurance company; or a bank, broker-dealer, FCM, or insurance company regulated in certain foreign jurisdictions. NFA can, however, grant exemptions authorizing the use of unregulated entities or of particular affiliates.

NFA's August 17, 2007 submission letter to the Commodity Futures Trading Commission includes a copy of the revised language as well as a more detailed description of the changes. You can access an electronic copy of the submission letter at National Futures Association | News Center.

Questions concerning these requirements should be directed to Sharon Pendleton, Director, Compliance, (spendleton@nfa.futures.org or 312-658-6540) or Valerie Kretschmer, Field Supervisor, Compliance (vkretschmer@nfa.futures.org or 312-658-6588).

©2003-2007 National Futures Association

New Quotes & Charts available at Futures

In our constant effort to improve the services of our web, we have launched a new Quotes & Charts service for the Futures section.

We are sharing this project with Interactive Data and Netdania, two of the leading companies in the sector, which provide us with the most up-to-date information for all the main futures markets.

Working with huge exchanges such as CBOT, EUREX, CME, ICE, LIFFE or Euronext we will be able to offer one of the most complete Q&CH service in the whole net. Right now we are offering a fantastic pack on Financials and Indices that will be very soon expanded with more intra-day information on Metals and Energy.

We hope that you enjoy it!

Trader's Journal Magazine Interview

Hi everybody

Are you really bored? Sure have nothing better to do?

Then be brave and read the interview Trader's Journal Magazine made me in their new issue about to be launched October 2007.

But remember that I warned you… you must have nothing better to do!

:)

Francesc

Download francesc_interview_Traders_Journal_Magazine_Sep07.pdf

NFA's President requests to increase net capital to $20 million before the Congress

Dan Roth the President and CEO of the NFA testified before a Congressional sub-committee yesterday regarding the reauthorization of the CFTC. Highlights of his testimony included his request for net capital to increase to $20 million and that all IB, Money Managers and any solicitors become registered with the NFA.

An interesting reading indeed!

Good night everyone

Francesc

Download nfa_testimonycftc_reauthorization_sept_26_2007.pdf

FXDD Response to "Open letter to FXstreet's clients affected by NFA capital requirement changes"

Hi everybody,

Mr. James E. Green, Managing Director at FX Direct Dealer, LLC (“FXDD”), sent me  a few days ago his response to our open letter to FXstreet's clients affected by NFA's capital requirements changes. I do not know why the e-mail entered in a wrong foulder and I´ve not discover it till five days later, so please Mr. Green accept my apologies for this unfortunated delay.

I want to thank Mr. Green for attending my request and I just hope that the last FXstreet's client affected - ITradeFX - will get back to me with their statement as soon as possible.

Francesc

Francesc: 

I am providing this memorandum in response to your email enquiry and further to our discussion of the issues you raised in your email.  I believe our telephone conversation clarified some of the questions you raised, particularly as they relate to the form of some the questions and terms that are, at least in the United States, what I terms of art.  I appreciated your candor during our discussion and I trust you appreciated mine.

The internet, like any anonymous means of publicly available communication, is a two edged sword and anonymous self censorship is not one of the internet’s strengths.  There is nothing to prevent one person’s comments from being taken out of context while providing anonymity to the person who republishes the comments in chat rooms and on bulletin boards. I know that many firms have been on the receiving end of comments they believe were unfair, half truths or simply wrong.  You have the unenviable task of trying to strike the right balance in publishing comments made on FXStreet.  Like most forums, FXStreet has allowed people to openly express their views anonymously.  There are always instances, as you and I discussed, where unhappy, unlucky and/or unskilled “traders” use the internet to vent their anger at one or multiple firms for both real and imagined slights.  As we noted, perhaps time could be better spent learning their craft, developing an understanding of how the OTC spot foreign exchange market actually works (rather than wishing it worked differently) and taking advantage of the services offered by the many excellent firms that appear on your site.

There has been much made of the NFA’s decision to increase capital requirements and we, like many firms, have fielded telephone calls from traders wanting to know how this increase in capital will impact the firm.  It seems as though these traders have all been reading each other’s mail or reading the same chats because they all refer to the companies that “the NFA put out of business.”  We tell our clients that FXDD will not be affected by the increase in capital requirements because FXDD is not registered with the CFTC and is not a member of the NFA.  We also note, however, that we do not believe that increasing capital requirements to $5,000,000 is sufficient.  If $5,000,000 is the miinimum threshold entry to the foreign exchange business, it is only a slightly higher barrier to entry than the previous $1,000,000 minimum capital requirement.  While it is true that the companies against whom the NFA took action were undercapitalized, their management’s lack of experience and expertise surely contributed to the failures.  Perhaps a “minimum net experience” threshold should also be a requirement.  We advise our clients that FXDD is well capitalized and holds substantially more capital than that belonging exclusively to its clients.  FXDD does not publish its capital or the amount of customer equity it holds.  Those prospects who demand to see our confidential financial information are advised that we do not release that information. 

As I suggested to you during our conversation, customer funds held for off exchange OTC transactions may not be deemed to be “segregated” as that term is understood in the context of the Commodity Exchange Act and the NFA’s regulations. Thus it is unclear whether funds held for such transaction are protected in the event of a bankruptcy.  To the best of my knowledge, only funds held for regulated activity in the futures markets will receive segregated protection.  Most firms, FXDD included, manage their own firm capital separate and apart from the margin capital posted with their liquidity providers.  Thus, firms who imply to clients that client funds are “segregated” are by reference seeking to assure the client that somehow their funds are secured and are protected.  This issue struck home with the Refco fiasco.  Perhaps the U.S. Congress will, at some point, extend the benefits of true segregation to client funds held by all foreign exchange dealers.  Currently, however, that option does not appear to be available to any dealer regardless of its registration status.  Thus it appears that once a firm files for bankruptcy protection, clients would not be able to withdraw their funds.  Those clients would become unsecured creditors of the firm. FXDD carries a blanket bond that covers theft, fraud and criminal activity by its officers and employees, but even that does not cover bankruptcy..  I do not know whether other firms carry such a bond.

The company listed on the CFTC’s website, Tradition Securities and Futures, Inc. (TSF) is not FX Direct Dealer.  Tradition Securities and Futures, Inc. is a registered futures commission merchant that does not deal in spot foreign exchange. TSF is owned by Tradition North America, Inc. which is also a minority shareholder of FXDD.  Tradition North America, Inc. is one of the largest interdealer brokers and provided financial and professional assistance to FXDD when it was a startup company.  Tradition North America, Inc. is part of the Tradition Group which has a forty plus year history in the financial markets (www.traditiongroup.com).  FXDD has maintained the policies, procedures and protocols established when it was a subsidiary of Tradition.

Regarding the business model that foreign exchange dealers follow.  Some firms accumulate customer positions; others pass those positions through to the dealer’s liquidity provider (STP); while others use a combination of accumulation and STP.  As we noted, some firms are now promoting “no dealing desk interference” as an added benefit. Whether no dealing desk “interference” is an added benefit is certainly an interesting question. From the client’s perspective (at least our clients’ perspective), the issue is not whether there is a perceived or actual inherent conflict of interest on the part of firms who may accumulate positions.  Our clients want to know that our desk manages client positions with integrity based on honest pricing and fair dealing practices.  Some firms have, rightly or wrongly, developed a reputation as “stop hunters,” and “boosters.”  Since the dealing firm knows all customer positions, it might be tempted to widen the market or boost the bid or offer just so that it can hit client stops.  Later they justify the price change based on a set of objective or subjective parameters.  Those firms, to our way of thinking, are not credible dealers and abuse their clients’ trust.  And firms who are strictly providing liquidity on an STP basis (no dealing desk interference) have the same ability to manipulate the price should they choose to.  Professional dealing desks like FXDD’s manage risk, execute customer trades when needed and provide constant liquidity to the firm’s clients. The bottom line is that clients must always demand credible pricing and honest dealing from their firm whether it is FXDD or one of the other excellent firms on your site.

I hope I have answered your questions Francesc.  FXDD prides itself on providing honest pricing, credible dealing practices, good client support and competent assistance with all matters relating to our clients’ accounts.  There are many good firms on your site and we, like them, would like to see the foreign exchange market grow.  The really good firms do not tolerate abusive activities or remarks aimed at their competitors and are content to let their services speak for themselves. 

BIS Triennial survey 2007: FX volume increases by an unprecedented 71% to $3.2 trillion

The Bank for International Settlemens has just released the preliminary results of its Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity in April 2007.

The BIS plans to publish a more detailed analysis of the results for the traditional foreign exchange markets in the December 2007 BIS Quarterly Review. In addition, the BIS will release the preliminary global results from the second part of the triennial survey covering open contracts outstanding in OTC derivatives markets at end-June 2007 in November 2007, and a final report with global results on foreign exchange market turnover and on OTC derivatives market turnover and amounts outstanding in December 2007.

The 2007 survey shows an unprecedented rise in activity in traditional foreign exchange markets compared to 2004. Average daily turnover rose to $3.2 trillion in April 2007, an increase of 71%. This increase was much stronger than the one observed between 2001 and 2004.

To read it all, please go to:

http://www.bis.org/publ/rpfx07.htm

GFT's CEO Answers to the Open Letter to Top FX Industry CEO's

Gary Tilkin, President & CEO at Global Forex Trading (GFT),  has been the 4th top executive of the selected 20 FX Brokerage firms to answer FXstreet's questionnaire regarding new NFA requirements and their potential impact on the FX industry.

I want to thank Gary for attending my request and wish him and his company GFT all the best of luck.

Francesc

Questionnaire:

1- What is your opinion on the recent NFA regulatory changes? How do you view the implementation of these new measures for FDMs?
In general, we view the NFA's new changes as a positive for the forex industry.  GFT has always operated with integrity and acted as though far tougher regulations existed in the retail forex industry, even prior to the Commodity Futures Modernization Act of 2000.  More recently, GFT has been working with the NFA on many of the new regulations you refer to, and in fact, GFT has suggested to the NFA some of the regulations that are being implemented.  GFT continues to speak with both the NFA and the CFTC in the U.S. to help work for a stronger retail forex industry.

2- The new proposal also calls for the use of proper and uniform accounting methods and tightens internal controls. Do you think this measure could affect your company's business in some way?
Most, if not all, of the proposed changes will affect GFT as they will affect all FDMs, but we view these as positive changes.  GFT practices proper accounting methods, and employs one of the world's big three accounting firms to do our annual audit as well as separate internal control-auditing.

Currently, GFT ranks as the #1 Forex Dealer Member, in terms of Adjusted Net Capital (according to the CFTC website, which lists Adjusted Net Capital figures for FCMs, including FDMs).  We have far more capital than the majority of FDMs and we strongly believe that our dominant position will continue, and in fact, grow with sensible regulations not only in the United States but around the world.

3- Do you consider these measures could be a breathe of fresh air that could result in more investors joining the FX Market?
The number of customers moving to the forex market is very impressive and we see this strong growth curve continuing for many years to come.  A properly regulated forex industry by well-informed regulators can only benefit everyone involved.

4- Switzerland has recently started a similar process, what is your opinion about it?
We would like to see similar regulations in most, if not all, developed nations of the world.  GFT has customers worldwide supported by three offices in the U.S. and outside of the U.S. in London, Tokyo and Sydney with more offices planned for 2008 and beyond, so we are in favor of consistent regulations globally.

5- Would your company be on the bid side if some firms were not meeting new requirements? What is your company's policy on acquisitions of smaller firms?
GFT has the capital, service levels and depth of products to be able to greatly benefit some of the smaller forex firms that find they cannot meet the new capital requirements.  With our three versions of order entry and analysis software (DealBook 360, DealBook Web, and DealBook Mobile) as well as our training and analysis products, we are uniquely qualified to give substantial upgrades in service to customers of smaller firms.  We currently have near perfect uptime statistics for our dealing platforms and substantial additional capacity, so we are always in a position to immediately add a significant amount of new trading volume. 

GFT is currently speaking with some of the smaller players in the industry who could benefit from our capital base and capabilities, and we are interested in speaking with any firm or customer who would like to partner with GFT.

6- How do you see the M&A market in the Forex industry? Do you expect important corporative movements in the next months?
There will probably be some mergers and acquisitions, but we don't expect many.

7- 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, i.e., trading 'against them', which contradicts traders' well-being. What is your company position on this? How do you hedge your customers' trades?
This question assumes something to be a fact where there is none.  The assumed fact is that forex dealers who "book" the trades of at least some of their customers are somehow working against those customers.  Perhaps in the old days of the true bucket shops or even in the more modern world of some smaller forex firms, there were or are those who may have wished their customer's ill. But to assume that the practice of booking trades of customers is working against those customers is a very naive and simplistic view of what is really happening. 

Many firms that own and operate their own software and are true forex dealers (as opposed to simple brokers--shifting the trades to someone else), often by virtue of filling orders instantly have to take those customer orders into their own book, at least temporarily.  This is often done to facilitate very quick executions of orders.  As these counter positions build up, the dealer often seeks to offset the risk of these positions with their various banks.  Depending on the size of the forex dealer's capital, the dealer may or may not offset certain levels of these counter positions.  To assume, however, that the dealer is then "working against" the customers with whom they hold non-offset positions is totally ridiculous.  Well-established, reputable forex dealers need never do anything to harm any of their customers to make good profits. 

At GFT, we profit by our customers becoming more successful and growing their accounts larger and larger and bringing more people into the business.  This is why we've developed a high-quality series of training courses for our customers, so they can become more knowledgeable and informed traders.

8- Would you like to add something else?
A closely related topic that has been promoted lately by some forex dealers is the notion that they have "no dealing desk."  While it may be true that the firm running such a promotion has no dealing desk itself, it borders on fraud to suggest that no dealing desk is involved in the forex transaction.  Those forex dealers who have no dealing desk are simply passing on the trades to one of the banks they deal with.  That bank, of course, has a dealing desk and handles that transaction the same as any other forex dealer would.  The biggest difference is that when a customer deals with a forex dealer who operates a dealing desk, the customer has the luxury of being able to call that dealing desk to discuss any problems or questions they may have on any of their trades. They can get a quick, informed answer as opposed to attempting to deal with a large bank that is shielded by a forex dealer that has no dealing desk and no intention of letting the customer talk to that bank's dealing desk.  The main point that customers must understand is that there is always a dealing desk involved in a forex transaction, and any attempt to confuse customers into thinking that there is not is highly dishonest.

Those firms that used to operate as forex dealers and are now operating as forex "brokers" (operating no dealing desk of their own but simply passing on trades to banks) are using a tried and true method of processing orders but may be short-changing their customers as they become a "middle man" for the transaction, placing the customer further away from the dealing desk that actually fills their order.  For small "hit and run" type of trades this may not be much of a problem, but for serious customers doing substantial forex trades and looking for the best in service, dealing with a firm operating a dealing desk staffed by helpful, experienced dealers is a huge advantage. 

Firms such as GFT who operate dealing desks properly can fill thousands and thousands of orders virtually instantly, but also have trained individuals monitoring orders to help customers with any situation.  Properly run dealing desks are simply a higher level of customer service as opposed to an impediment to execution speeds. 

Contrary to popular opinion, when dealing with forex dealer members acting as brokers, customers must realize that their broker makes a portion of the spread that is added on to the dealer spread. And as they are a degree separated from the actual dealing desk where the trade occurs, there is less discretion that the market maker/dealer can have in order acceptance, especially since  there are  additional revenue streams for each order (orders introduced by introducing brokers may also have additional mark-ups applied).  Common side effects experienced by the trader include more trade rejections and generally higher rates of slippage. 

At GFT, customers see and can execute their trades on streaming prices 24 hours a day, almost 6 days a week, directly with a market maker.  On liquid markets, GFT customers have access to trade up to 20 million in notional volume with a single click of a mouse.  Unlike most of our competitors, GFT does not widen spreads during market volatility, due to its interbank dealing relationships and the liquidity that GFT has available during even the most turbulent market conditions. 

Gary Tilkin, President & CEO at Global Forex Trading

Week of September 17th: The Best Week Ever in the History of FXstreet.com

Hi everybody,

I'm more than happy than month after month I'm coming to you to announce that FXstreet.com is hitting new all-time records in audience.

This time I'm very glad to announce that the week from September 17th to 23rd has been the best week ever in our 7 years and something history.

On that week we didn't only get a new all-time record September 18th with almost 40,000 visitors but we got the best Sunday ever with 33,000 visitors more than twice the regular traffic we have any given Monday.

The numbers for the week of Sept. 17th were as follows:
350,381 Visits
152,540 Absolute Unique Visitors
994,387 Pageviews
2.84 Average Pageviews
00:03:47 Time on Site

I wish that from now on we will get 150k unique visitors per week - 600k unique visitors per month - but I doubt we will be able to match this numbers in the coming weeks. I was not expecting this numbers not early than February 2008 so please be very welcome!

All the best

Francesc

FXCM's CEO Answers to the Open Letter to Top FX Industry CEO's

Drew Niv, CEO at FXCM,  has been the second top executive of the selected 20 FX Brokerage firms to answer the questionnaire we sent yesterday morning regarding new NFA requirements and their potential impact on the FX industry.

I want to thank Drew for attending my request so quickly and wish him and his company FXCM all the best of luck.

Francesc

Questionnaire:

1 - What is your opinion on the recent NFA regulatory changes? How do you view the implementation of these new measures for FDMs?
We believe the new NFA regulatory changes will lead to a consolidation of the retail forex industry. The consolidation will benefit FXCM, since we easily meet the new proposed regulations.

The proposed regulations will require that firms have at least $5 million in net capital. However, the requirement for brokers with large amounts of customer capital could be substantially higher. We estimate that as many as 20 firms would not be able to meet this requirement if enforced today.

The forex industry in the long term will benefit from having a smaller number of better capitalized brokers. In essence, a broker with more firm capital is less likely to make imprudent decisions that would put its funds and its customer funds at risk.

Although these new regulations are good for the industry, the resulting short-term changes may be difficult for clients whose brokers do not meet the new requirements. We hope that the NFA will make every effort to facilitate an orderly transition as brokers make new arrangements to enable their clients to trade through firms that meet the new requirements.

2 - The new proposal also calls for the use of proper and uniform accounting methods and tightens internal controls. Do you think this measure could affect your company's business in some way?
No. FXCM’s accounting practices will not be affected by the new proposed regulations. Our own business standards led us several years ago to adopt the practices specified in the new proposed regulation.

For the last six years, FXCM has been audited by major accounting firms which audit public traded companies. Our financial statements comply with international GAAP standards. 

To live up to these higher standards, we have had to maintain a highly trained and professional staff of accountants and internal auditors. We believe only a large firm, such as FXCM, can make the type of investment in financial integrity which will now be required of all FDMs by the new proposed standards.

3 - Do you consider these measures could be a breathe of fresh air that could result in more investors joining the FX Market?
Yes. The FX market has been growing at an incredibly fast pace. However, its momentum could be slowed if one or more brokers became insolvent. These new proposed rules significantly reduce the probability of that happening. Thus, the proposed new rules help protect the future of the industry.

My personal opinion is that the emerging credit crisis will have a major impact on equity markets. As profitability in trading stocks becomes more difficult, there will be a mass of traders into forex. We do not want those traders’ first opinion of forex trading to be of  an industry in need of regulation.

4 - Switzerland has recently started a similar process, what is your opinion about it?
Switzerland’s regulation of the forex market has lagged years behind the world’s other major financial centers. The recent insolvency of a Swiss trading firm, TradeX, highlights the dangers of dealing with a broker based out of Switzerland, where there is currently minimal regulatory oversight. As Switzerland moves to correct these problems, it will help the world-wide forex industry.

Every time a major country embraces regulation of retail forex trading, such as Japan in 2005 and the United States in 2000, the industry has grown.

5 - Would your company be on the bid side if some firms were not meeting new requirements? What is your company's policy on acquisitions of smaller firms?
FXCM is in discussions with several small and mid-sized FDMs who are concerned about their ability to meet the new proposed requirements. We are interested in purchasing the client accounts of these firms, or finding  a mutually beneficial relationship with them.

The FXCM Group is uniquely positioned to accept and service the books from other brokers. We have  1) A global footprint with offices in the Americas, Asia and Europe; 2) A staff of over 500 capable of handling the migration of a large numbers of client; 3) over $100 million in group capital to fulfill the capital requirement associated with servicing these new clients.

A forex broker seeking a buy or an IB relationship must first of all consider the buyer’s ability to pay. Brokers will have thousands of  clients trading many millions of dollars; the buyer will be obligated to rebate millions of dollars to them. The brokerage firms must satisfy themselves that the buyer can afford to do that – in fact, has been routinely doing that for years.

Also: The broker must be assured that the buying firm can absorb thousands of new clients, service them well and, in order to continue to continue to receive revenue from their trading, keep them as clients.

The most important reason that many FDMs are considering a relationship with FXCM involves trust. In blunt terms, FXCM can always be trusted to pay the firm’s owners the revenue their accounts earn – in full and on time. FXCM has been working with Introducing Brokers for over eight years. In fact, our very first Introducing Broker continues to refer business to us.

Our No Dealing Desk business Model is ideally suited to processing a large Introducing Broker book of business. Under our No Dealing Desk system, our monthly revenues, in the form of pip markups, are an exclusive reflection of trade volume: if we do X volume, we book X pips. And the revenues of our IBs move in perfect concert with our own, since they are rebated an exact percentage of total volume.

The revenues of a market-making broker, on the other hand, are not only dependent on volume, but may vary significantly depending on the quality and effectiveness of the broker’s traders as well as market volatility. Therefore, if the FDM allies with a market maker, and that market maker suffers a losing month, yet still owes a volume rebate to the IB, the IB may encounter difficulties in collecting everything it is owed.

6- How do you see the M&A market in the Forex industry? Do you expect important corporative movements in the next months?
Six. The M&A market in forex is particularly tough for several reasons.

• No common standards – for software platform, accounting standards, back office procedures. It makes integrating an acquisition much more difficult than a firm in the equity industry, for example, where standards are shared.
• Recent market volatility meant rising volumes and profits for most firms. August was one of the best months in FXCM Group’s history – we had over half a trillion in trading volume – and we suspect that other firms also did very well. This recent success, I believe, will make owners of smaller brokers reluctant to sell. As a founder of a forex firm, I completely understand their feelings and their attitude. It is very tough to exit now. However, as the new proposed regulations come closer to enactment there may be a major re-assessment.
• Many private equity firms and venture capitalists are eager to fund profitable forex firms. But they are in search of the fastest and surest payout, and will tend to ignore all but the largest and most competitive forex firms on the market. Furthermore, they realize that even those large FDMs have been put in a weak – and perhaps ultimately desperate -- bargaining position by the new proposed regulations, and will negotiate accordingly. If past is precedent, at contract time the deal will become much more one-sided, and full of pitfalls for the forex broker owner. Private equity firms are expert at negotiating terms that are extremely profitable for them but costly for the business owner. 

The  illusion of private equity firms lining up to invest in the business may give the owner false hope that buckets of cash are theirs for the taking. I believe that once the FDM owner is discouraged by the private equity experience, actual M&A activity between forex brokers will intensify.

7 - 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, i.e., trading 'against them', which contradicts traders' well-being. What is your company position on this? How do you hedge your customers' trades?
We believe that No Dealing Desk model is best for both trader and  broker, and FXCM is totally committed to it. Over 99.9% of our business is conducted on this model.

FXCM was primarily a market maker until the end of 2006, when we took a 180 degree turn to the agency execution model. So we know the market-making business. Currently, many of our competitors believe that because volatility has returned, market making is the more profitable business model. That is true -- in the short term. Long-term, however, the no dealing desk system is better for both the broker and the client, for several reasons.

• Better Execution During News Events & Market Volatility.  In the past few years, clients have become much more focused on trading news events --  those turbulent times when it is most difficult to make prices. By aggregating large bids and asks from the large banks, we solved that problem, and the proof is that since we inaugurated no dealing desk our trading volume during news events has grown immensely. Market makers, however, have an especially tough time during news trading, because if they honor all prices they will lose money. (When we were market-making we certainly lost money during the big market moving news events.) Remember too that the market-maker’s prices are removed from the real market, and so they must protect themselves by offering created prices. We avoid the problem by having the world’s largest banks streaming their prices through us.
• Lower Spreads. We can now review our policies relating to prices and markups above the best bid/offer we get from the banks, and we’ve introduced fractional pips to further tighten spreads. In the next few months we will continue cutting the cost of trading pairs across the board. And we have launched numerous incentive programs to provide additional discounts to high-frequency traders.
• Greater Opportunity to Scalp the Market. Many traders favor short-term scalping strategies. For scalping to be profitable for the client, the market maker must lose. So either the market maker takes the loss or disallows the strategy. With no dealing desk we are able to accommodate scalpers – but of course we clearly warn them of the risks involved.
• Aligned Broker-Trader Interests.  The no dealing desk strategy has aligned FXCM’s interests with those of our customers. Since it is in our interest for them to trade more, we want them to increase their profits and account sizes. We have studied which trading behavior is most profitable for the retail trader, and have discovered that most retail clients are less successful when they trade pairs with large swings – especially GBP/USD. They are much more profitable with the quieter, range-bound pairs like EUR/CHF, EUR/ GBP and AUD/NZD. To give our clients an extra incentive to trade the more successful pairs, we have been aggressively reducing our markups on these pairs to make their spreads the tightest of all the currencies we offer.
• Easier Implementation of Programmed Trading.  We can now accommodate more black box traders, both those with high-frequency systems and those with break out systems. The change to no dealing desk allows us to service a large new group of traders who never thought of trading through us when we were market-makers.

8 - Would you like to add something else?
The major reason for the proposed regulations is that the NFA and the industry realizes that we must provide more funds security to forex traders. The new proposals are a major step forward, but I think we all realize they don’t go far enough.

I am proud to say that FXCM is in the vanguard of the movement to convince the US Congress to pass legislation extending funds segregation to the forex industry. In fact, we have even established a Political Action Committee to support and coordinate the actions of this Safety of Funds initiative, and we have convinced three other large FCMs to add their names to our petitions. We are urging every firm in our industry to join us in this effort.

FXCM already has the ability to offer our clients segregated forex accounts. Thanks to our British subsidiary, accounts with Forex Capital Markets LTD (FXCM-UK) are fully segregated in accordance with United Kingdom financial regulations.

GFX Group's President Answers to the Open Letter to Top FX Industry CEO's

Peter Furrer, President at GFX Group SA,  has been the third top executive of the selected 20 FX Brokerage firms to answer the questionnaire we sent yesterday morning regarding new NFA requirements and their potential impact on the FX industry.

I want to thank Peter for attending my request and wish him and his company GFX Group SA all the best.

Francesc

Dear Francesc,

Thank you for the privilege to be part of your survey.

First I would like to confirm, that I concur with the opinion that some of the changes in progress will affect not only the retail FX industry but more importantly the customers view on this business. Security and safety of funds is the most important concern of any investor and if the retail FX industry is capable of confirming that, I am certain, we will see an increase in business. Unfortunately this primarily means investments & costs for us, as every new bureaucratic measure has its price tag.

I tried to be as short and precise as possible – my comments below your respective question.

Please do not hesitate to contact me in case you might have any further question.

With kind regards

Peter Furrer
GFX Group SA

 Questionnaire:

1 - What is your opinion on the recent NFA regulatory changes? How do you view the implementation of these new measures for FDMs?
GFX Group SA is currently not affected by these changes.

2 - The new proposal also calls for the use of proper and uniform accounting methods and tightens internal controls. Do you think this measure could affect your company's business in some way?
Yes, in 2 ways – 1st from an expenditure point of view. Operational & controlling costs will increase substantially in the industry and 2nd from a client confidence point of view. Transparency & tighter controls provide the customers with a higher level of security comfort.

3 - Do you consider these measures could be a breath of fresh air that could result in more investors joining the FX Market?
Yes, see above.

4 - Switzerland has recently started a similar process, what is your opinion about it?
Highly supportive. General Financial Market reputation is at stake without some control & supervision. Regulators focus should be on security of investor funds without an extravagant and expensive bureaucratic process.

5 - Would your company be on the bid side if some firms were not meeting new requirements? What is your company's policy on acquisitions of smaller firms?
To be reviewed on a case-by-case basis – but reluctant to look at companies that could not meet the new requirements. Interest depends on possible market perception and - penetration.

6- How do you see the M&A market in the Forex industry? Do you expect important corporative movements in the next months?
Not in the next few months but - especially on a technical / operational basis - within the next year or two. The regulatory requirements will force some FX traders to join forces with competitors to get a grip on costs.

7 - 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, i.e., trading 'against them', which contradicts traders' well-being. What is your company position on this? How do you hedge your customers' trades?
The current business model of brokerage houses taking opposite trading positions is a question of taking a calculated risk and having enough capital in order to absorb a potential trading loss. Prudent risk management is the essence. We are hedging in the market.

8 - Would you like to add something else?

Sam Seiden at today's 3-hours Monthly Webinar

Hi everybody,

Maud Gilson, live manager at FXstreet.com, ask me if I could help her to spread the word that FXstreet’s Monthly Webinar is back after summer break. This month, our guest speaker is Sam Seiden from the Online Trading Academy.

Sam Seiden brings over 15 years experience of equities and futures trading which began when he was on the floor of the Chicago Mercantile Exchange. He has traded equities, futures, interest rate markets, forex, options, and commodities for his personal interests for years and has educated hundreds of traders and investors through seminars and daily advisory services both domestically and internationally.

He will hold a 2-parts educational live session named "Translating Floor Trading Emotion into Profitable Screen Based ForexTrading" today, Thursday 20th.

First part is open to all FXstreet.com users for free and will take place from 13:00 GMT to 14h15 GMT. Second part is reserved for Premium users only and will start at 14:30 GMT and finish at 16:00 GMT.

Sam will deal with these topics:

PART 1: Open
1) How the markets really work, removing the veil of illusion in Forex trading
2) Trade what is real, not what you feel
    - Any and all influences on price are reflected in price
    - Translating floor trading emotion into screen based trading
    - Conventional technical and fundamental analysis has it all wrong
3) Quantifying supply and demand:
- Identifying micro and macro demand in Forex
- Identifying micro and macro supply in Forex
- Identifying balance and imbalance
- Real time trend analysis
4) Establishing the “Profit Margin”
    - The objective measure of profitability

To register, click here

PART 2: Premium
5) Stacking the odds with objective and mechanical rules
    -Only take on risk when the odds are stacked in your favor
6) Mechanical rules for entries and exits
    - The universal high probability entry for any Forex trader
    - Low risk entries are the key to proper position size
    - Be first in line, at the right time
7) Money Management and position management
8) The Trading Plan
9) Putting It All Together

I hope you'll join us for this great educational experience!

Francesc

InterbankFX's Chairman and President answers to the Open Letter to Top FX Industry CEO's

Todd B. Crosland, Chairman and President at Interbank FX has been the first top executive of the selected 20 FX Brokerage firms to answer the questionnaire we sent this morning regarding new NFA requirements and their potential impact on the FX industry.

I want to thank Todd for such a quick response and wish you and your company Interbank FX all the best of success.

Francesc

Questionnaire

1 - What is your opinion on the recent NFA regulatory changes? How do you view the implementation of these new measures for FDMs?
The NFA’s primary concern is to protect the individual investor. The NFA has been very vigilant in policing our industry. I personally support the efforts of the NFA. By the end of September or October, the CFTC will approve the NFA’s proposed increase in minimum net capital. The new minimum net capital requirement will be $5,000,000. If firms offer great than 100:1 leverage, they will need to maintain two times the required minimum or $10,000,000. Since most all FCM’s offer mini accounts with 200:1 leverage, all FCM’s will need $10,000,000 in net capital. The current net capital requirement is $1,000,000 or 5% of customers funds. Since our customer funds balance is over $100,000,000, we need to maintain 5% of this amount in net capital. Since we offer 200:1 or 400:1 leverage to our customers we need to maintain two times the required net capital. Based on our customer funds balance we need to maintain in excess of $10,000,000 in net capital. So the NFA’s increase in minimum net capital will not affect Interbank FX, since our net capital is over $27,000,000.

I believe that the requirement for FCM’s to have $10,000,000 in net capital is good. This will assure that customers funds will be safer and that firms involved in the industry will be sufficiently capitalized.

2 - The new proposal also calls for the use of proper and uniform accounting methods and tightens internal controls. Do you think this measure could affect your company's business in some way?
Interbank FX has always have significant financial and operational controls. Requiring this for all FCM’s again is very positive for customers.

3 - Do you consider these measures could be a breath of fresh air that could result in more investors joining the FX Market?
The greater transparency and financial stability for FCM’s and customers will be positive for the industry and will attract new participants to the Forex market.

4 - Switzerland has recently started a similar process, what is your opinion about it?
I am not familiar with the proposed regulations in Switzerland, but again I support this regulatory effort.

5 - Would your company be on the bid side if some firms were not meeting new requirements? What is your company's policy on acquisitions of smaller firms?
Interbank FX will be interested in bidding for firms that do not meet the new stricter requirements. We are currently actively working on this at the present time.

6- How do you see the M&A market in the Forex industry? Do you expect important corporative movements in the next months?
I do not believe that there will be any M&A activity in the top six US FCM’s, of which Interbank FX is one of these. But the smaller firms with under $10,000,000 in net capital, I believe there will be activity with these firms. These small firms will either have to raise additional or try to sell to a larger FCM. The NFA reported in August that 25 of the 40 Forex Dealer Member FCM’s would not meet the required $5,000,000 minimum net capital requirement. With the required $10,000,000 minimum net capital to offer mini accounts with 200:1 leverage, the number of FDM – FCM’s would be left to less than 10. This means that possibly 30 Forex Dealer Member FCM’s will not meet the new requirements.

7 - 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, i.e., trading 'against them', which contradicts traders' well-being. What is your company position on this? How do you hedge your customers' trades?
Interbank FX does not trade against our customers. We have a pure “agency” model and “back to back” all customer trades with the counter party Bank’s that we deal with. We only make money when our customers trade. The more our customers are profitable, means the more trades our customers make. Our interests our squarely aligned with our customers. Most firms make their money when their customers lose money. I do not support this model. Our goal is to provide free tools for our customers to become successful. In the tracking that we do with our customers, we have found that 49% of our standard accounts have been profitable over the last 24 months. I believe this is an industry high. Other firms that trade against their customers will never have the incentive to provide the tools for their customers to be successful. Could you ever imagine going to Las Vegas and having someone at the casino stop you any teach you how to be successful? The same is true with the firms that trade against their customers.

Please let me know if there is anything else we can help with.

Regards,

Todd B. Crosland
Chairman and President
Interbank FX

Sept 18th, FXstreet.com reaches a new all-time record in a single day

Hi Everybody,

I think I should start this post by thaking Mr. Bernake - I do not have the pleasure to have met him in person - to surprise the markets yesterday night by cutting rates in the US by half a point.

So thanks a lot Mr. Bernake!

FED's decision attracted many visitors to FXstreet.com till reaching almost 40,000 unique visitors and over 200,000 page views.

68,657 Visits
39,464 Absolute Unique Visitors
209,208 Pageviews
3.05 Average Pageviews
00:04:26 Time on Site

Also, thank you all for coming.... I hope you found at FXstreet.com the information you were looking for

Francesc

Saxo Bank Acquires Swiss Synthesis Bank

Hi everybody,

Arnaud Jeulin, founder and CEO of the great FX site Mataf.net has sent me a press note released last week announcing Synthesis Bank acquisition by Saxo Bank.

Both are clients of mine and I didn´t have a clue of such acquisition!!!! shame on me :)

Here you have the press release for all of you.

Thanks Arnaud!

Francesc

Saxo Bank Acquires Swiss Synthesis Bank

Copenhagen/Geneva: 13 September 2007 Saxo Bank is making the acquisition of Synthesis Bank in an agreed transaction together with the board and the shareholders of Synthesis Bank. The acquisition is a new milestone for Saxo Bank in its rapid global expansion. A pioneer and a global market leader in online investment, Saxo Bank offers the award-winning SaxoTrader platform to a growing worldwide community of investors.

In a statement announcing the acquisition, Kim Fournais and Lars Christensen, founders and joint CEOs of Saxo Bank A/S, said: “Synthesis Bank is a perfect fit for Saxo Bank. Synthesis employees are highly skilled and known to be top-performers. The bank’s reputation with regard to service and execution is second to none.”

The CEOs point out that in addition to the know-how and the collective acumen of the employees of Synthesis, Saxo Bank will acquire an operation with an interesting and lucrative client portfolio. Saxo Bank plans to grow its business significantly from Switzerland and Synthesis will help with implementing this strategy.

Charles-Henri Sabet, the founder, majority owner and CEO of the Swiss online investment bank, becomes a member of Saxo Bank’s Senior Executive Management and will head up all Saxo Bank’s trading activities.

“For me, this transaction is the perfect match between two partners that know and trust each other,” said Sabet. “Furthermore, our strategies mimic each other and our product offerings consist of the same mix of FX and derivatives, such as CFDs.”

Synthesis is one of Saxo Bank’s biggest partners and becoming one bank will, according to Sabet, create so much synergy and opportunity that it can only benefit clients, employees and shareholders.

A significant share of the world’s private wealth is managed by Swiss financial institutions. Both Sabet and the two Saxo Bank CEOs point out that the combined forces of Synthesis, one of the best known and most competitive online banks in Switzerland, and Saxo Bank, comprise a very powerful mix. They are convinced that this deal enables Saxo Bank to expand its wealth management product range even more rapidly than in the past.

Saxo Bank’s trading platform, SaxoTrader, has for three consecutive years won the prestigious e-FX Award as the best online retail trading platform. This comes on top of a long list of awards from Euromoney, Profit & Loss Magazine and other top accolades from the industry.

Soeren Mose will take over as the new CEO of Saxo Bank Switzerland. An off-shore banking veteran with 15 years experience and a long time CEO of Jyske Bank’s Switzerland operations, Mose brings the needed experience and expertise to take the bank to the next stage in its continued growth.

Thierry Thevenaz, formerly partner and deputy CEO at Synthesis Bank, will head a new trading desk servicing high net worth clients. Saxo Bank’s Executive Director Claus Nielsen will continue to be responsible for all daily trading and execution activities in Copenhagen. Both Nielsen and Thevenaz will report to Sabet.

Synthesis Bank has been a partner of Saxo Bank for 4 years and all Synthesis’ clients already execute their trade on a version of SaxoTrader. Since both banks use the same trading platform, the client offering will be exactly the same. Clients will immediately take advantage of the competitive pricing and innovative solutions offered by Saxo Bank.

As part of the same roadmap for international expansion, Saxo Bank has opened offices in London, Singapore and Marbella over the past year. A representative office was opened in Beijing this summer. Further expansion in other parts of the world, wherever commercial rationale supports the business case, is an integral component of Saxo Bank’s overall business growth and development strategies.

Synthesis is headquartered in Geneva and also operates an office in Zürich. The acquisition is expected to be completed later this year. Completion of the transaction is subject to obtaining the necessary regulatory approval from both the Swiss and Danish banking authorities. Synthesis will then become Saxo Bank Switzerland.

Open Letter to Top FX Industry CEO's

As promised a few weeks ago, I'm going to send to all CEO's of FXstreet's brokers list an open letter regarding NFA new requirements and their potential impact in the FX industry.

FX firms to be contacted are as follows:

FXstreet.com Clients:
- GFT
- FXCM
- Saxo Bank
- InterbankFX
- ODL
- CMC Markets
- MF Global
- Forex.com
- FX Solutions
- Synthesis Bank
- MIG Investments
- Crown Forex
- dbFX
- Forex.ch
- CMS Forex
- ACM
- Swedish Forex
- WestcapFX

Note: ITradeFX, FXDD, FXClub and MG Financial were already contacted a few weeks ago

Non-FXstreet.com Clients:
- Oanda
- HotspotFX

Open Letter to Top FX Industry CEO's

Dear….. CEO,

We at FXstreet.com are closely following last developments in the US after NFA proposed rule changes for FDMs.

You are running an important company of the Forex industry and new requirements will not only affect your company but the whole industry. Some even say these requirements could produce a big shake out in the retail FX industry.

We at FXstreet.com would love to get your opinion on it.

We would be very pleased receive your answers.

All responses will be published on my personal blog: http://weblog.fxstreet.com and links to it will be placed all over FXstreet.com

Thanks for your collaboration,

Francesc Riverola
CEO
FOREXSTREET SL
http://www.fxstreet.com 

Questionnaire:

1 - What is your opinion on the recent NFA regulatory changes? How do you view the implementation of these new measures for FDMs?

2 - The new proposal also calls for the use of proper and uniform accounting methods and tightens internal controls. Do you think this measure could affect your company's business in some way?

3 - Do you consider these measures could be a breathe of fresh air that could result in more investors joining the FX Market?

4 - Switzerland has recently started a similar process, what is your opinion about it?

5 - Would your company be on the bid side if some firms were not meeting new requirements? What is your company's policy on acquisitions of smaller firms?

6- How do you see the M&A market in the Forex industry? Do you expect important corporative movements in the next months?

7 - 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, i.e., trading 'against them', which contradicts traders' well-being. What is your company position on this? How do you hedge your customers' trades?

8 - Would you like to add something else?

$100-Million Investment in OANDA Corporation

Hi everybody,

A friend of mine sent me this morning a presse release interesting enough to be shared with all of you.

Francesc

$100-Million Investment in OANDA Corporation Recognizes Growth Potential in the Frenetic World of Forex

New York, Toronto, and Zurich - September 17, 2007 — OANDA Corporation, well known for pioneering Internet-based forex trading and a global leader in currency information services, announces today that a consortium of investors has invested $100 million in the company's Series B round of venture capital funding.

The consortium is led by New Enterprise Associates (NEA) and includes Legg Mason, Cascade Investment LLC, and T. Rowe Price. They join existing investor Index Ventures, which led the company's $17-million Series A investment in September 2005. "This investment is important to OANDA, not only as a vote of confidence in the way we do business, but because the additional capital solidifies our ability to serve corporate and institutional clients," said Michael Stumm, CEO and co-founder of OANDA Corporation.

OANDA successfully redefined the business model and the practice of currency trading with the release of FXTrade, which challenged the way old-line forex brokers had traditionally served currency traders. OANDA has made it possible for investors to take advantage of tight spreads, more flexible trade sizes, continuous interest, and true straight-through processing (STP) — important features that previously were not uniformly available to all investors. "From the outset one of our most important goals was to democratize the forex market. We will use our new capital to continue that pursuit as we develop new products and services in this emerging marketplace," added Richard Olsen, who co-founded OANDA with Stumm in 1996.

Krishna Kolluri, a general partner at New Enterprise Associates who will join the OANDA board of directors, explained that "OANDA's trading platform is technologically the most sophisticated in the industry and was a big reason for our investment. It is OANDA's use of that technology to redefine currency trading that separates it from its competition. We look forward to a long and successful relationship with this outstanding team."

NEW: Webinars VIDEOS on FXstreet.com

Hi all,

one of Fxstreet.com's old projects seems to become reality... I'm happy to announce you that we have now some educational webinars recordings available for all Fxstreet.com users on our webiste! You can now access these videos from our “Transcripts” menu in the Live Section.

These first recordings are taken from educational sessions held by John Jagerson and S. Wade Hansen (Profiting with Forex), recent collaborators and speakers of our Live Section. Our plans are to display other speakers' educational sessions in the future. I'll keep you post on this of course.

We think this tool can be very useful and educative and some of you have been demanding it for a while. From now, users who want to review a session or simply play a missed session can do it for some of our webinars. It has not been that easy to set up but it seems we now found a way to do it!

I hope you'll enjoyt it!

Francesc

Strong frontline of speakers at the ITC 2007

Hi everybody

I got today a very nice e-mail from one of ITC 2007's attendees. This e-mail was in response of the e-mail I sent to all 38 paid registered members by then to let them know that Ed Ponsi and Raghee Horner will not be with us in October.

Here you have Gary's e-mail:

Francesc,
It's sad to know that Ed and Raghee are not coming. However, I belive the event will be a memorable one due your enthusiam to make it successful. Although meeting with many famous traders in 3 days is great, spending more quality time with a smaller number of traders is not too bad as well. Having said that, I just wonder if you ever cosider asking Nicole Elliot or other exisitng speakers to expand their role in the event instead of just trying to find more speakers. regards,

gary

My answer to Gary's e-mail was:

Dear Gary

We are consider such possibility indeed. I think we have a strong frontline of speakers and it could be wise to expand their role on the event as you said. We must ask them for their approval but it is something considered indeed thanks for your great feed-back

francesc

I think Gary had a point and this issue is being considered at FXstreet.com

I just wanted to share this interesting conversation I had with Gary with all of you my blog's readers

Francesc

FXstreet.com on TV

Hi everybody,

Yesterday a TV crew came to FXstreet's offices to interview Toni Juste about new euro highs against US dollar.

The report was broadcasted at the evening news of TV3 channel, the Catalonia's television.

The report and the interview are in Catalan. As you all probably know, here in Catalonia - north east of Spain - we speak both Catalan and Spanish.

If you want to watch it, we have uploaded it to YouTube for you:

http://es.youtube.com/watch?v=rKRIxD8HjpA

Btw, yesterday I was not at the office as I was still recovering from a virus I got three weeks ago. Nobody from FXstreet.com told me nothing about TV coming till it was too late, so I was not able to come and take Toni's place :) dam it! :) The glory should have been mine! :)

just kidding :)

 

Francesc

Ed Ponsi and Raghee Horner's last minute withdrawal from ITC 2007

Hi everybody,

More news about the ITC... this time I am quite sad to have to announce you that Raghee Horner and Ed Ponsi won't be able to come in Barcelona in next October.

Both were guest speakers of our conference but they have last minute and unexpected obstacles. They tried everything to find a solution but they unfortunately can't make it.

Ed Ponsi, author of a recent and successful book, has been offered a huge promotional tour in Asia and can't combine it with his ITC participation. Raghee on her part has personal and unexpected commitments.

They are both very sorry for this last minute withdrawal and present all ITC attendees their genuine apologies.

You can all be sure FXstreet.com is already doing all the best to find other quality speakers to substitute Raghee and Ed. We are already talking with some internationally renowned speakers and we will of course announce you their names as soon as their participation can be confirmed.

Also remember that our other guest speakers are very good and renowned experts: Rob Booker, Nicole Elliott, Andrew Hard Tony Juste,Wayne McDonell and Ron Schelling!

Once again, I would like to present all our apologies for these last minute cancellations. This event will be a great event, no doubt! Thank you very much for trusting in Fxstreet.com, we will do the impossible to not disappoint you.

Francesc

Saxo Bank sends a representative to ITC 2007

Hi everybody,

Guillermo Galey, manager of the Institutional Desk Spain of SAxo Bank A/S has registered to attend the International Traders Conference Barcelona 2007

Saxo Bank is the second FX brokerage firm after FX Solutions sending a representative to FXstreet's ITC. We consider this a very important contribution to the success of the event as our attendants will be able to speak to FX broker's representatives face-to-face going much further than in any conversation you can have in a tipical FX Show with a sales representative at the broker's booth.

With Guillermo we have toped 38 paid members so far, so we are just two members behind our goal of at least having 40 attendants.

At this time, the country's race in the ITC is leaded by the UK with 9 representatives, Spain with 6 and the US and Portugal with 3.

UK: 9
SPAIN: 6
USA: 3
Portugal: 3
The Netherlands: 2
Germany: 2
Norway: 2
Austria: 2
Cyprus: 2
Luxembourg: 2
Belgium: 2
Australia: 1
Finland: 1
Greece: 1
TOTAL: 38

Let´s see if we reach the magic 40 number soon!

Francesc

Real Top10 research reports on FXstreet.com in August 2007

Hi everybody

Apologies but I didn´t use the right data yesterday to build the Top10 research reports list on FXstreet.com in August 2007.

I have corrected the list and now is fine

Please, accept my apologies for any inconvenience I may have caused you

Francesc

Today I want to share with you the real top10 most read research pages on FXstreet.com:

1. Today's Technical Trading Points by Danske Bank A/S with 29,652 page views - Technical Analysis/Technical Analysis Reports
2. Forex Technical Report by iFOREX.bg with 16,926 page views - Technical Analysis/Technical Analysis Reports
3. Spot Forex Trades by Forex Survivor with 15,352 page views - Technical Analysis/Signals
4. Mid-day Forex Technical Report by ActionForex.com with 12,951 page views - Technical Analysis/Technical Analysis Reports
5. Daily Technical Analysis by Mizuho Corporate Bank with 10,891 page views - Technical Analysis/Technical Analysis Reports
6. Daily Forex Strategy Briefing by CMS Forex with 8,699 page views - Technical Analysis/Trading Strategy
7. Chart Patterns by Autochartist with 7,666 page views - Rates & Charts Section
8. Daily Recommended Trades by E-Forex with 7,382 page views - Technical Analysis/Forecasts
9. Currency Performance Report by FXstreet.com with 6,934 page views - Technical Analysis/Trading Strategy
10. Currency Majors Technical Analysis by Mataf.net. with 6,811 page views - Technical Analysis/Technical Analysis Reports

Congratulations to Danske Bank, iForex.bg, Forex Survivor, Action Forex, Mizuho Bank, CMS Forex,  Autochartist, E-Forex, Mataf.net and FXstreet.com

Keep up the good work

Francesc

Top10 research reports on FXstreet in August 2007

Hi everybody

Today I want to share with you the top10 most read research pages on FXstreet.com:

1. Today's Technical Trading Points by Danske Bank A/S with 12,500 page views - Technical Analysis/Technical Analysis Reports
2. Chart Patterns by Autochartist with 7,516 page views - Rates & Charts Section
3. Daily Technical Analysis by Mizuho Corporate Bank with 5,505 page views - Technical Analysis/Technical Analysis Reports
4. Daily Market Commentary by Global Forex Trading Ltd. with 1,750 page views - Technical Analysis/Technical Analysis Reports
5. Daily Forex Strategy Briefing by CMS Forex with 1,731 page views - Technical Analysis/Trading Strategy
6. Currency Performance Report by FXstreet.com with 1,604 page views - Technical Analysis/Trading Strategy
7. Daily Analysis by Finotec Group Inc. with 1,541 page views - Technical Analysis/Market View
8. Action Bias Summary Table by ActionForex.com with 1,437 page views - Technical Analysis/Technical Analysis Reports
9. The Word of Majors by FXstreet.com with 1,123 page views - Technical Analysis/Technical Analysis Reports
10. Global Liquidity Crisis by FXstreet.com with 1,097 page views - Fundamental/Special Coverage

Congratulations to all of you

Keep up the good work

Francesc

The Brokers (re) Evolution: NFA new regulation

Hi everybody

In order to keep you all posted about this important issue, Marina Schiaffino has updated her special coverage about it with new interesting stuff

Please, visit:

http://www.fxstreet.com/fundamental/analysis-reports/the-brokers-re-evolution/

Also, Mr. Toni Juste - FXstreet's FX Advisor and Director of FXstreet's MAP program - will share his point of view with all of us in a special NFA's new regulation webinar Thursday September 13th

To register, go to:

http://www.fxstreet.com/live/sessions/session.aspx?id=d5abd84b-8da4-4d57-8873-52ab6b66be27

Francesc

FX Club Response to "Open letter to FXstreet's clients affected by NFA capital requirement changes"

Hi everybody,

Mr. Peter-Tatarnikov, Vice-President of Forex Club Financial Company, sent me  today the response to our open letter to FXstreet's clients affected by NFA's capital requirements as I requested a few weeks ago.

I want to thank Mr. Tatarnikov and FX Club for attending our request and I now hope the other firms affected ITradeFX and FXDD will get back to me with their statement as soon as possible.

Francesc

note: The message from Mr. Tatarnikov posted below has neither been modified nor changed, so I just copied and pasted it into TypePad web site to upload to my blog. In fact, I´ve not even read it yet and I won´t do it till it is posted online and available for everybody.

1. NFA is expected to raise soon capital requirements to Forex brokers.
- How are you adapting to the new NFA requirements?
I surmise that the new rules would be beneficial for the industry. Even though they would increase entrance barriers to the market, at the same time they would ensure that those entering have sufficient resources remain financially stable regardless of market conditions and also have sufficient expertise to manage risks.

- Does your company hold more assets than those belonging exclusively to clients' deposits?
No, but we have access to the financial resources necessary to satisfy the new capital requirement, if adopted.

- Are client's funds segregated from the firm's own capital? Are they used in any way by the firm?
Our client’s funds are separated from our own funds – they remain in the designated bank accounts regularly monitored by the NFA.

2. In case that you don't meet the new financial requirements, what are you planning to do?
We have been expecting new requirements for quite some time and, actually, even welcomed them. Thus, new rules would not come as a surprise. It would be an adequate response by the NFA to the growing importance of Forex market in general. New requirements would have no effect on our long-term strategy – providing superb services and products to our customers, effectively managing risks and so fourth.

- In case you had to fill for bankruptcy, are your customers aware of that possibility at this time? Will they be protected?
Our firm is in a great financial standing and new financial requirements would not alter the situation. New capital requirements would be positive because they would further improve industry standards. As soon as these rules become official we will update our customers on what this means for Forex industry in general and for them in particular.

- 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?
Our name is one of our greatest commodities. It has substantial value. Undermining it by declaring bankruptcy or failing to fulfill any of our contractual obligation vis-à-vis our customers would be myopic, irrational and antecedent to our business interests. Let’s put it this way - our name has a larger value than all of our customer funds because it is this very name that brings us customers.

- How long could it take for a customer to withdraw the funds in his/her account in case you were filling for bankruptcy?
If this was to happen, it would be done in accordance to the US bankruptcy laws. However, we do not consider bankruptcy as an option for us. If one day capital requirements were to be raised hundredfold, we would still not declare a bankruptcy. Instead, we would form a relationship with a broker with sufficient capital to satisfy the new requirements.

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, i.e., 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?
As a matter of fact, the business model of Forex brokerage firms is not so unique. When a Forex firm takes an opposite side of a position it essentially assumes risks. When an insurance firm issues insurance it also assumes risks. If an FX trade is so large that a broker puts itself in a danger of not being able to pay profits, it will carry the risks over to a larger broker (its clearing house). Similarly, when someone asks a medium-sized insurance firm to issue insurance for a giant sea liner, the firm will carry the risks over to a larger insurer. Naturally, when risks are passed “up the ladder” so is the reward potential. Those involved in the debate around “trading against a customer” should not forget that risk management is at a core of every financial market. Even if there was only one Forex broker in the world it would still be taking the other side of a trade (i.e. managing risks).

This being said, however, it is important to prevent brokers from acting opportunistically – carrying more risks than they can handle and thus jeopardizing their financial stability. Smaller firms are more likely to be risk-averse. Smaller firms are also less likely to have expertise necessary for proper risk management and, perhaps, more likely to lack discipline for internal controls. The new rules will weed out some smaller firms, enhance the NFA’s ability to monitor remaining firms (it is easier to monitor 10-15 brokers than 30-35) and make the words “NFA-regulated” more meaningful for brokers and their customers.

Peter-Tatarnikov
Vice-President
Forex Club Financial Company
info@fxclub.com

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FXstreet.com reaches a new all-time high in August

Hi Everyone

As I forecasted in a post from August 21st FXstreet.com managed to reach a new all-times record in unique visitors and visits in August 2007.

We closed August with 329,844 unique visitors and 1,234,918 views, overcoming the previous highs of 326,000 unique visitors and 1,200,000 views of July.

In page views we made 3,830,308 page views, so I´m expecting to touch a new all-time page views high in September or October, overcoming the current high of 4,000,000 page views reached in May 2006, the month before we changed to the new .NET web site with Ajax technology.

Even though the new highs touched, we were far behind the 350,000 unique visitors I was expecting so let´s see if next month I´m able to draw better growth forecasts or we will have to change the forecaster :)

As always, thanks all for visiting us and making FXstreet.com possible.

Francesc

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