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Regulatory Changes In Retail Forex Market Will Continue

EU banks are upset about new U. FinanceFeeds - The US authorities got a day continuance in order to carry on with discussions concerning a possible disposition of the case. Events Services Contact us. The size and financial strength of ADM supports their mission statement: Below is a list of those penalites:. Secure and reliable access to your account information is one of our highest priorities. The most knowledgeable was a guy in the compliance dept at the CFTC.

A forex dealer member (FDM) is an entity that acts, or offers to act, as a counterparty to an off-exchange foreign currency transaction with a person who is not an eligible contract participant and the transaction is either.

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This tax treatment departs significantly from s issued for a default investor using the cash method of accounting. The IRS understands the difference. Example tax return footnote for a forex client who received a Form Taxpayer received a Form treating his forex contracts like forwards or forward-like.

Those same rules say no should be issued for spot forex. By default, forex spot and forward contracts have Section ordinary gain or loss treatment.

Section reports realized gains and losses only, whereas Section g reports realized, plus mark-to-market unrealized gains and loss treatment at year-end, too. Taxpayer did not file an internal opt-out election from Section , and therefore he must report using the default Section ordinary gain or loss treatment for realized gains or losses, only.

If the taxpayer is an investor, he reports that ordinary gain or loss on line 21 of Form Other Income or Loss. If the taxpayer qualifies for trader tax status business treatment , he reports the Section ordinary gain or loss on Form , Part II ordinary gain or loss.

Forex is reported in summary fashion, not line-by-line fashion as done for securities. The amount we transfer to the correct form and line is the realized gain or loss, only.

Only Form includes year-end unrealized gains and losses too on a mark-to-market basis. Bottom line issuance rules have always been confusing and misunderstood by taxpayers. When you receive a W-2, you simply report the tax information provided. You need to consider your own facts, circumstances and tax-treatment elections to report your correct taxable income, loss and expense.

This year, securities traders face a barrage of problems with new IRS cost-basis reporting rules for B issuers. We are finding huge problems on these s. See our earlier blogs on this. When it comes to taxes, take the control away from your broker and consult a trader tax expert when needed. Is forex trading safe in the U. The CEO of Rockwell Trading brought up this court case and discussed his concerns about forex brokers and their platform markets on our Oct.

The CEO focused in on this quote in the case: The retail forex industry should be run better with the new rules. American forex traders are being forced to trade with no more than Because leverage with currency futures is not far off We will compare tax treatment between forex and futures next week.

More forex traders may want to consider trading currency futures too. New CFTC retail forex rules are going into effect exactly as we thought they would. Foreign accounts transferred back to the U. The trader has no choice in the matter. Foreign commercial banks unaffiliated with any U. We have not confirmed this yet, though. Attorneys, CPAs and financial advisors who suggest using dummy corporations to evade these CFTC rules may face challenges by their professional license boards and bars on infractions to their ethical codes of conduct.

If you are foolish enough to use a dummy offshore corporation in this regard, you still need to disclose your American ownership of the corporation to your foreign broker, who may deny the account treating it as an American-owned account. For this reason, some U. We heard that the UK offered some money protection on forex brokerage accounts.

In a bankruptcy filing in the U. This is an oversight from Congress. This is not the case for commercial banks; only brokers. A CFTC official told me he feels forex is still safer under their new rules with registration of RFEDs, minimum capital requirements, better disclosure and lower leverage.

There may be some money protection issues in the UK, but working with an unregistered broker or bank and using unlimited leverage might make it more unsafe overall. Traders may have trouble and higher costs seeking remedies in foreign jurisdictions too. If a retail trader enters a prohibited transaction working with an unregistered RFED offshore, he may not have rights to use U. Both RFEDs and commercial banks may offer leverage up to Only the commercial bank may offer protection on your money.

Skip the idea of setting up a dummy offshore corporation to work with a non-registered foreign broker or bank. Congress and regulators have thrown the forex trading industry a huge curve ball and we are all scurrying to get answers to important questions. Many questions remain regarding trading offshore to evade leverage and other constraints posed by the new CFTC rules. Today we try to answer a few more questions along these lines.

The answers are still unclear, and we await new NFA guidance, which was promised to one forex dealer executive. A forex dealer executive told me the NFA may actually be waiting on the CFTC regarding the overseas issue, and he expects it will take more than a few days.

The overseas firestorm is probably underway. This gives EU banks offering forex trading to U. FI and FCM seem to be different categories. So if this forex broker says its U. If the foreign account is deemed a foreign affiliate of an existing CFTC-registered FDM, then using the day extension seems inappropriate to me for financial institutions.

There are plenty of people asking these important questions, as thousands of Americans have offshore retail forex trading accounts. It makes sense to me that DF gives days to foreign institutions to form U. To spring a prohibition on foreign financial institutions offering forex trading to U. There may be lawsuits and diplomatic requests made and this takes plenty of time to deal with properly.

This is a huge problem for the U. EU banks are upset about new U. 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. This expected notice may not speak to the foreign trading issues, although hopefully it will. Will this be automatic? How can FDMs make many changes in their registration by Oct.

This executive said many U. He said if a person files for bankruptcy in the U. Leverage is unlimited in the UK, but usually I presume leading forex dealers can move UK capital back to U.

This executive says non-residents international business may want to stay in the UK since the U. The biggest concern is upsetting some U. FDMs in the forex dealer coalition are fine on these new rules per this executive. They expect the RFED change to be fairly easy to accomplish. I see a big problem for foreign forex dealers operating from tax havens. Registration for foreign companies probably requires a U.

Branch office taxes can lead to trouble on Section transfer pricing tax issues where the profits are booked. If the IRS finds trouble with tax haven cheating, it can pounce on these institutions.

The final rules are better than expected from the proposed rules. There are many characters in the forex industry that inappropriately blur the lines between education, investment advice, money management and other related services. Many of these forex players may be drawn into registration in some capacity with the NFA and CFTC, perhaps as an IB, and many will want to avoid that registration for many different reasons.

Some may have trouble passing NFA back ground checks. Many will surely have trouble with the conflicts of interest rules too. The attorney and author of this article said to me via email: I say that the enforcement issues are unresolved in our article both because of the practical realities involved in enforcing this rule and because this was just an opinion of one regulator, not of the Agency.

Excellent comment on our FaceBook page: The most knowledgeable was a guy in the compliance dept at the CFTC. He says the rules apply to any brokerage, foreign or domestic, that wants to do business with U. Apparently the NFA has a list of what it considers the major currencies.

In other words, any currency that retail traders are likely to trade will be at I can live with that. The CFTC has published its highly anticipated final rules for trading off-exchange retail forex. Some of the changes are crystal clear — like new Unlike most off-exchange retail forex dealers in the U. INteresting how the system spiked the price almost to the exact stop loss point and then re-priced again to the previous level.

I am beginning to believe there are no honest brokers in the forex game. I don't know how a firm registered with the CFTC can get away with this level of dioshinesty. I really do not understand why some Forex Brokers have cheat and deceive their clients. I was just doing some research and I came across this NFA action.

There is enough money in the Industry without having to defraud and mislead clients. That is pretty desperate if you ask me because the email violation carries a multi million dollar fine. Earnforex does it's best to warn new traders and I thought I would try and do my part by posting this NFA action. I have no axe to grind with this Company. This is just intended save you from heartache at a later date. A K fine is one thing, but what about the customers who are used, abused and manipulated.

As such, Interbank FX was and is required to comply with NFA Requirements and is subject to disciplinary proceedings for violations thereof.

As such, Crosland was and is required to comply. NFA Compliance Rule b provides, in pertinent part, that no FDM shall cheat, defraud or deceive, or attempt to cheat, defraud, or deceive any other person. NI-A Compliance Rule Z-3b c provides that I—VMS and their Associates shall observe high standards of commercial honor and just and equitable principles of trade in the conduct of their foreign currency futures and options business.

NFA Compliance Rule e provides that each FDM shall diligently supervise its employees and agents in the conduct of their foreign currency futures and options activities for or on behalf of the FDM. Operational funds are kept completely separate from client funds. Funds never come to an Interbank FX company account for your protection. Again, because we have set up a separate account for you, in this instance you would simply request your funds and they will be immediately wired or mailed to you.

While currency futures have the added baggage of trading commissions, exchange fees and clearing fees, the Forex market has eliminated such expenses to the investor. The substantial leverage that is available to online Forex Traders can be a powerful money making tool. This unmatched volume and liquidity is one of many advantages that the Forex markets have over currency futures. Your trades are typically executed within one second and go directly to our banks.

That means that no one is interfering with the prices and pip spreads. With the vast number of traders involved in the Forex market, the trading volume offers price stability and a consistency in fair market pricing.. Liquidity in the equities market is not [sic] match to the liquidity that the Forex market offers.

The brochure contained the following representations:. Your trades are executed instantly and directly with our banks. Interbank FX made the following representations in one or both of the above publications:.

The representations referred to in paragraphs 10, 11 and 12 above were deceptive and misleading in the following respects:. The diligent supervision of employees and agents in the conduct of their foreign currency futures and options activities for or on behalf of an FDM requires, in part, FDMs and their Associates who have supervisory duties to supervise the content and use of promotional material to ensure that it is in compliance with all NFA Requirements.

Interbank EX and Crosland failed to adopt and implement effective steps to supervise the content and use of promotional material to ensure that it was in compliance with all NFA Requirements. The Answer shall respond to each allegation in the Complaint by admitting, denying or averring that you lack sufficient knowledge or.

An averment of insufficient knowledge or information may only be made after a diligent effort has been made to ascertain the relevant facts and shall be deemed to be a denial of the pertinent allegation. NFA staff is authorized to grant such reasonable extensions of time in which an Answer may be filed as it deems appropriate. The place for filing an Answer shall be:. Failure to file an Answer as provided above shall be deemed an admission of the facts and legal conclusions contained in the Complaint.

Failure to respond to any allegation shall be deemed an admission of that allegation. Failure to file an Answer as provided above shall be deemed a waiver of hearing. At the conclusion of the proceedings conducted as a result of or in connection with the issuance of this Complaint, NFA may impose one or more of the following penalties:.

The allegations in this complaint may constitute a statutory communication from registration under Section 8a 3 M of the Commodity Exchange Act. Respondents in this matter who apply for registration in any new capacity, including as an AP with a new sponsor, may be denied registration based on the tendency of this proceeding. Do yourself a favour Check out every other broker on here before you look at IBFX.

Because if you check IBFX out first, you wont have a chance to see how poorly put together the other companies are! IBFX has great customer service, education, spreads, and neat add-ons for Metatrader. The size of thier daily trades speaks for itself. Honestly, these guys are excellent, and with anonomous market execution, it means you are not dealing against your broker Please disable AdBlock or whitelist EarnForex.

MetaTrader 4 Limited with 20 days of inactivity. Australian dollar United States dollar. Show currency pairs Hide currency pairs. Email Live chat Office Phone. Trailing stop Pending orders One-click trading Mobile trading Automated trading. Show history Hide history. Reviews 12 reviews of IBFX are presented here. Sunday, November 2, Thursday, April 10, Donald Frederick , US.

| By: Robert A. Green, CPA

The National Futures Association (“NFA”) requires each Forex Dealer Member (“FDM”), including GAIN Capital Group, LLC (“GAIN Capital”), to make the following information publicly available on its website. FDM Filing Requirements. Forex Dealer Members (FDM) have the following filing requirements: Required Accounting Records. Each FDM is required to maintain an accounting system that records all of the firm's financial activity. Rule (b)(1) prohibits a Forex Dealer Member (“FDM”) from engaging in a forex transaction that cheats, defrauds or deceives any other person. Similarly, Rule (b)(4) prohibits an FDM from engaging in any manipulative acts or practices regarding the price of any foreign transaction.