The Farm Bill just passed the Senate in a landslide, 81-15, which is a veto proof margin. With veto proof margins in the House and Senate it is now clear that the Farm Bill is going to become law.
Senate passes $289 billion farm bill, 81-to-15 - MarketWatch

Bush is expected to veto the bill and it appears Congress is preparing to override the veto no later than Memorial Day.

In any case, this is a seminal day for the U.S. retail forex trading industry.

I was always against Aleccoh because the funds were initially funneled through a personal account. That's just silly. I have a high confidence that Aleccoh always was and still is a scam, they didn't set things up with any modicum of professionalism - just features. There is a difference.

Tradition Group North America owns FXDD's IP addresses, a member of 1280 IP's total.
Tradition Group with NFA as a known entity:
BASIC Details
See also this post on Forex-TSD.com metatrader Brokers
My previous research posts: Fxdd

Some direct links to Tradition Group:
Tradition Lausanne
CFT - Compagnie Financière Tradition

They are #3 in the world, and #1 in Europe. I figure the third largest broker in the world is well capitalized.

What I RESENT is the NFA filing requirements that trickle down to everyone who is in any way dealing with an NFA registered company. That might kill the nonprofit IB I have set up unless we can get 25 people and decent volume *just to afford the IB fees with the NFA*.

Ian Smith

Arbitrage keeps the ECN and pricing pools in synchronization. Forex shouldn't be a centralized market, that is worse than having a global centralized stock market and even more misguided. The banking ring networks function just fine thank you. Your animosity toward retail brokers is well founded, but your declaration of war is misplaced.

In terms of regulation, there should be higher requirements than affording an MT4 license. But the NFA is crazy/insane. They are a business and adding more fees increases revenue. Now they are becoming an *enforced* monopoly as well. Joy. I'm looking into Panama brokers (privacy by law - still looking into specific companies), Swiss brokers (eh... ), etc.

Reading through that document, I get the distinct impression that it completely destroys MT4. The way that MT4 dealer desks work completely violates that bill. They wouldn't be able to fill at the price you request, they would be required to give you slippage. The only forex software that I personally know of that would allow you to legally trade would be the horrible chart free program from MBTrading. Maybe the EFX or new version has charts?

I'm wondering if MT4 could be modified enough to make it legal. I'm working with their Server API now, and it just ... I don't know if it can work. At the very least, most EA code would break because of the AcceptSlip parameters. This of course, assuming that brokers follow the new regulations.

Crazy!!
‘‘SEC. 4b. CONTRACTS DESIGNED TO DEFRAUD OR MISLEAD.
‘‘(a) UNLAWFUL ACTIONS.—It shall be unlawful—
‘‘(1) for any person, in or in connection with any order to
make, or the making of, any contract of sale of any commodity
in interstate commerce or for future delivery that is made, or to
be made, on or subject to the rules of a designated contract
market, for or on behalf of any other person; or
‘‘(2) for any person, in or in connection with any order to
make, or the making of, any contract of sale of any commodity
for future delivery, or other agreement, contract, or transaction
subject to paragraphs (1) and (2) of section 5a(g), that is made,
or to be made, for or on behalf of, or with, any other person,
other than on or subject to the rules of a designated contract
market—
‘‘(A) to cheat or defraud or attempt to cheat or defraud
the other person;
‘‘(B) willfully to make or cause to be made to the other
person any false report or statement or willfully to enter or
cause to be entered for the other person any false record;
‘‘(C) willfully to deceive or attempt to deceive the other
person by any means whatsoever in regard to any order or
contract or the disposition or execution of any order or con-
tract, or in regard to any act of agency performed, with re-
spect to any order or contract for or, in the case of para-
graph (2), with the other person; or
‘‘(D)(i) to bucket an order if the order is either rep-
resented by the person as an order to be executed, or is re-
quired to be executed, on or subject to the rules of a des-
ignated contract market; or
‘‘(ii) to fill an order by offset against the order or orders
of any other person, or willfully and knowingly and with-
out the prior consent of the other person to become the
buyer in respect to any selling order of the other person, or
become the seller in respect to any buying order of the other
person, if the order is either represented by the person as
an order to be executed, or is required to be executed, on or
subject to the rules of a designated contract market unless
the order is executed in accordance with the rules of the
designated contract market.


It *appears* that (D)(ii) turns anyone who trades the *net* trades of the clients into a criminal. An outright criminal for maintaining a *net* position. (*@#&$(*@#&$@(*#&*(

Sooo... Panama, Switzerland... where else?

Edit: I'm still trying to find out if the individual traders are allowed to trade in markets outside of the US. i.e. an American opening an account with MiG or NorthFinance.

Page 550, (II)(cc)
‘(cc) any person who would be exempt from
registration if engaging in the same activities in
connection with transactions conducted on or sub-
ject to the rules of a contract market or a deriva-
tives transaction execution facility.

You can no longer be a US based IB for foreign companies unless the foreign companies also register in the US and change the way they trade.

Here's the section that says they can send Interpol, HSA, or whatever agency they designate after the trader/broker/IB:
‘(III) The Commission may make, promulgate, and en-
force such rules and regulations as, in the judgment of the
Commission, are reasonably necessary to effectuate any of
the provisions of or to accomplish any of the purposes of
this Act in connection with agreements, contracts, or trans-
actions described in clause (i) of this subparagraph if the
agreements, contracts, or transactions are offered, or en-
tered into, by a person that is not described in item (aa)
through (ff) of subparagraph (B)(i)(II).

I'm not sure, but this section appears to mean *each trader* needs to be registered with the NFA. How do I register my EA exactly?
‘‘(iii)(I) A person, unless registered in such capacity as
the Commission by rule, regulation, or order shall deter-
mine and a member of a futures association registered
under section 17, shall not—
‘‘(aa) solicit or accept orders from any person that
is not an eligible contract participant in connection
with agreements, contracts, or transactions described
in clause (i) of this subparagraph entered into with or
to be entered into with a person who is not described
in item (aa), (bb), (dd), (ee), or (ff) of subparagraph
(B)(i)(II);

Essentially, to hit the "buy" or "sell" button you need to be one of these people from (B):
‘‘(iii)(I) A person, unless registered in such capacity as
the Commission by rule, regulation, or order shall deter-
mine and a member of a futures association registered
under section 17, shall not—
‘‘(aa) solicit or accept orders from any person that
is not an eligible contract participant in connection
with agreements, contracts, or transactions described
in clause (i) of this subparagraph entered into with or
to be entered into with a person who is not described
in item (aa), (bb), (dd), (ee), or (ff) of subparagraph
(B)(i)(II);
described in section 1a(20) of this Act, is reg-
istered under this Act, and is not a person de-
scribed in item (bb) of this subclause, if the af-
filiated person maintains adjusted net capital
equal to or in excess of the dollar amount that
applies for purposes of clause (ii) of this sub-
paragraph and is not a person described in
such item (bb), and the futures commission
merchant makes and keeps records under sec-
tion 4f(c)(2)(B) of this Act concerning the fu-
tures and other financial activities of the af-
filiated person;
‘‘(dd) an insurance company described in
section 1a(12)(A)(ii) of this Act, or a regulated
subsidiary or affiliate of such an insurance
company;
‘‘(ee) a financial holding company (as de-
fined in section 2 of the Bank Holding Com-
pany Act of 1956);
‘‘(ff) an investment bank holding company
(as defined in section 17(i) of the Securities
Exchange Act of 1934 (15 U.S.C. 78q(i))); or
‘‘(gg) a retail foreign exchange dealer that
maintains adjusted net capital equal to or in
excess of the dollar amount that applies for
purposes of clause (ii) of this subparagraph
and is registered in such capacity with the
Commission, subject to such terms and condi-
tions as the Commission shall prescribe, and
is a member of a futures association registered
under section 17.

I'm getting the general impression that since this act includes the trader, the broker, the associated persons AND their counterparties, that this act essentially establishes all dominion over anyone in the US from doing business with anyone who *isn't* registered in the US. In other words, the US market can only trade with the US market, or firms outside the US market who have joined the US market regulations.

Did I mention they are crazy? Crazy.

According to the Washington Post Bush will still veto the farm bill. However, the veto will not be sustained in Congress.
washingtonpost.com

I'm not sure what "owns FXDD's IP address" actually means in reality, but it does seem a tenuous sort of relationship! Appreciate the links btw - I had a quick look at Tradition Groups figures and there's no denying, they do appear quite profitable. Which makes FXDD's initial stance regarding NFA membership all the more suspect - it suggests that they do not have recourse to any of the group funds...

PS. Being a non-profit IB, does this also mean you are a "paid-up" user of the Metatrader broker s/w (if it's not too intrusive a query)?

IB's don't pay MT4 licenses, and neither do white labels. (White Labels are glorified IB operating under their own name.)

The technical and legal connection between FXDD and Tradition Group is very solid, and it is very well structured for tax and liability purposes. There is a lot of clout behind FXDD, and they are by no means at risk of bankruptcy. The question was: do they have capital? The answer is yes. They sponsor the trading competition too. FXDD is no small player, they used to have IBFX as a whitelabel. (IBFX used FXDD to execute trades.) Later IBFX switched to FXLQ, and now they need to pay their own license fees.

A community effort to sign up under an IB costs the traders nothing, the proceeds come out of the broker's spread. The broker's spread is now going away with the new laws. So will most leverage and small lot sizes. I'm writing senators who recently switched sides supporting the bill but obviously haven't read the 700+ page monstrosity.

Aleccoh and FXLQ supposedly "had capital" but we could not get to it...because of the "liability purposes/arragements"...well the NFA will put a stop to that!

ES

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Live Portfolio (This takes a while to download as it is a big excel spreadsheet)

This isn't strange with US and others countries law and sometimes is very good and sometimes not.

One external example is the EU regulations about personal data. A country outside the EU needs to be in agreement with EU regulations to establish a legal e-business, data transfer, provide services, etc.

In my country personal data protection is a lot better than in US, however US companies like Goog or YH does not accept to operate under local law and has been take to court many times.

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