These reports are for Nov. 2007 but NFA have new minimum on Dec. 21, 2007. We may need to wait until next month to get the new reports for the new minimum capital requirement.

With the data released by CFTC and by following the news from NFA we only need to use maths.

Anyway, it´s pretty hard to know the real thing behind the numbers. Accountability can not be expressed in real time reports. We always be behind .

FXLQ accomplished all requirements month by month and we know what´s happened.

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Well it appears the NFA is not done with its capital increase crusade. They are pushing hard in the Congress to increase the minimum capital requirement to $20 million and it appears they have succeeded. The Congress has passed legislation to do just that:

Forex Street Weblog: New bill means though times for retail FDM's

When such a new rule would become law is unclear. But it looks like we'll have to go through this whole capital requirement ordeal again...

With Congress set to increase capital requirements to $20 million and with the NFA having previously narrowed down the list of U.S. Brokers to 24 I thought it helpful to post the numbers for the remaining brokers in business so everyone knows where the industry is at in the here and now:

According to the latest CFTC Report:
Financial Data for FCMs

Advanced Markets $1.3 million
Alpari $6.4 million
Bacera $3.1 million
CMC $2.7 million
CMS $11.4 million
Easy Forex $7 million
Forex Club $4.8 million
Friedberg Mercantile $7.9 million
FX Solutions $26.9 million
FXCM $75 million
Gain Capital $50 million
GFS Futures & Forex $3.6 million
GFT $57 million
Hotspot $6.1 million
I Trade FX $23.8 million
IFX $17.1 million
Ikon $9.1 million
Interbank FX $30 million
MB Trading $6.6 million
Money Garden $5.3 million
Oanda $159 million
ODL $13 million
PFG $12.8 million
RJ O'Brien $91 million

The FXLQ Hearing has been deemed unnecessary and a preliminary injunction has been declared. In effect, this means that funds will be frozen indefinitely while things proceed throught the legal system. I have written the CFTC and requested consideration be given to releasing FXLQ customer account funds in order not to add additional hardship. I suggest all who have funds with FXLQ do the same. Best wishes.

Advanced Markets just got nailed for shoddy book keeping. Here is the the NFA's official statement:

Following my letter to the CFTC requesting consideration be given releasing FXLQ client funds, I received the following reply:

"...We are certainly mindful of your concerns and those voiced by the many other affected customers, and we believe the receiver is also mindful of the dilemma the asset freeze poses for customers and will take that into consideration in connection with any recommendations to the Court.

We expect that the Receiver’s interim report should be posted on the Receiver’s website either by Feb. 4th, or by the following Monday Feb. 7th."

Since only the court is authorized to actually order the release or distribution of FXLQ customer funds, we can hope that there will be some kind of tangible recommendtion contained in the Receivers Interim Report scheduled for Feb. 4 so keep the letters to the CFTC and Receiver rolling in.

Thanks for the update. I do hope that customers of FXLQ receive justice.

2007 was a year of change in the forex industry, most of it for the better as some of the seediest firms in the industry were shown the door thanks to the NFA’s capital requirement increase. But 2008 appears to be an even more momentous year of change for the U.S. forex industry. And those changes may not necessarily be for the better.

The Savior has long been an advocate of healthy capitalization in the industry. But the recent legislation set to pass in the Congress should be a cause for serious concern for all forex traders. The last few weeks I have received numerous emails and done some research through helpful links provided on the bulletin boards and have come to the realization that this legislation is not good for the trading public.

Wha? I know, I know. The Savior has been preaching the virtues of high capitalization so in theory he should support increasing capitalization to $20 million right? And in fact at first I was sympathetic to this proposal. But the bottom line is the Savior is also a trader. And as a trader I am worried that by restricting this industry to just a handful of the larger players (FXCM, GFT, Gain, Oanda) that speads will once again widen. Take FXCM for example. Their spreads have been tightening for the past year in response to the increased competition taking place in the marketplace. But what happens if that competition gets eliminated altogether? How does this affect the average trader?

The $5 million rule needed to be put into place. There were too many tiny bucketshops doing serious damage to traders. Even now I still have my suspicions about tiny little outfits like AMIFX who are barely treading water even after the $5 million requirement.

Nevertheless, with the House already passing a law to require that all firms have a minimum $20 million on hand (and who knows what other capital requirements will be imposed upon the industry) the barrier to entry is getting sky high and few firms are going to be able to make the cut. My understanding is that the Senate has not approved the House’s language. So there may still be a chance to stop this law from passing.

Also it appears that introducing brokers are going to be wiped out entirely. There are a bunch of registration requirements that may very well strangle most introducing brokers and put them out of business.

I don’t think people realize just how perilous the situation is. This could all become law in a month’s time. Traders, brokers and medium sized dealers should call their Congressman right away. It seems Congress is only hearing from the regulators, not the general public. As a trader I want a healthy industry with stable, well capitalized firms. But I also want good service and tight spreads. Having only 6 firms in the industry is not going to guarantee either.

Should the Congress pass legislation requiring all firms have a minimum net capital requirement of $20 million the following firms will be in danger in the United States:

Advanced Markets $1.3 million
Alpari $6.4 million
Bacera $3.1 million
CMC $2.7 million
CMS $11.4 million
Easy Forex $7 million
Forex Club $4.8 million
Friedberg Mercantile $7.9 million
GFS Futures & Forex $3.6 million
Hotspot $6.1 million
IFX $17.1 million
Ikon $9.1 million
MB Trading $6.6 million
Money Garden $5.3 million
ODL $13 million
PFG $12.8 million

Now, many of these firms have additional capital they can infuse into their firms (particularly foreign firms like IFX and CMC as well as domestic ones like Hotspot.) But many do not. The customers of these firms should take notice, and if you want to keep trading with these firms, take action.