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FXCM's Suhail Afzal and Brad Gleason - Ask Me Anything (AMA)


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FXCM's Suhail Afzal and Brad Gleason - Ask Me Anything (AMA)

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  #101 (permalink)
 FXCM Suhail 
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lrfsdad View Post
@FXCM Suhail I trade mostly from my mobile phone. I don't see Russian Ruble as a tradeable product, yet alot of my twitter news feeds were mentioning RUB this am due to the continuing oil slide and excessive spreads due to volatility. Can I trade RUB with fxcm?

Please be advised that most Western Banks have stopped pricing USD/RUB. As such, FXCM can no longer offer this instrument to our clients and began closing any existing client trades in USD/RUB effective at noon NY time on December 16, 2014. Alternatives to trading the Russian ruble directly are discussed in this DailyFX article by quantitative strategist David Rodriguez: https://www.dailyfx.com/forex/fundamental/article/special_report/2014/12/15/forex-Russian-capital-controls-are-major-risk-and-Ruble-in-danger.html

If you have any questions about the products or services provided by FXCM, please send me a Private Message or use the BMT "Ask Me Anything" thread
 
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  #102 (permalink)
 Big Mike 
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FXCM near collapse after $250M loss post-SNB

Largest Retail FX Broker Stock Crashes 90% As Swiss Contagion Spreads | Zero Hedge

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  #103 (permalink)
 torroray 
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Big Mike View Post

Close your account and look who is still standing after a few weeks.

 
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  #104 (permalink)
 FXCM Suhail 
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January 16, 2015

Leucadia National Corporation and FXCM Announce $300 Million Financing to Permit FXCM to Continue Normal Operations

NEW YORK--(BUSINESS WIRE)-- Leucadia National Corporation (NYSE: LUK) and FXCM (NYSE: FXCM) today announced that Leucadia would be providing $300 million in cash to FXCM and its subsidiaries (collectively "FXCM") that will permit FXCM to meet its regulatory-capital requirements and continue normal operations after yesterday's loss of $225 million due to the unprecedented actions of the Swiss National Bank. Under the terms of the agreements, Leucadia is investing $300 million in cash into FXCM in the form of a $300 million senior secured term loan with a two-year maturity and an initial coupon of 10%. The term loan obligations are guaranteed, on a secured basis, by certain of FXCM's domestic subsidiaries. In addition, Leucadia will receive, in the event of a sale of FXCM or its subsidiaries, a certain percentage of the sale proceeds and, in the event FXCM makes other distributions on account of its equity, a corresponding payment for its own account. This transaction is expected to close this afternoon. Drew Niv, Chief Executive Officer of FXCM, stated: "We could not be more grateful to Leucadia and its team for their rapid and effective response and to our regulators, who have been willing to work with us through this challenging process. Leucadia's support and this financing are by far the best alternative for FXCM, our customers, our shareholders, and all other relevant constituencies. We are pleased to continue to act as the leading online provider of foreign exchange trading and related services to retail and institutional customers worldwide."

Click to see full press release: bit.ly/1ua85Ve

If you have any questions about the products or services provided by FXCM, please send me a Private Message or use the BMT "Ask Me Anything" thread
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  #105 (permalink)
 Big Mike 
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FXCM letter to clients to repay negative balances | LeapRate

FXCM-2013.12.31-10K


Quoting 
Our policy is generally not to pursue claims for negative equity against our customers

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  #106 (permalink)
 Jason Rogers 
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Hi Mike,

Here's an FXCM business update we just released:

Strong Operating Metrics

Through Thursday, January 22, FXCM's month-to-date retail customer trading volume, which includes all retail FX and CFD volume, is $406 billion* with 30% coming from the last 5 days alone, which included a U.S. bank holiday. Average retail customer trading volume per day during this period is $27 billion.* As of January 22, tradable accounts were 224,547, and client equity was $1 billion.

"A week after the unprecedented movement of the Swiss Franc, and our financing agreement with Leucadia, FXCM continues to operate in the normal course of business. All of our entities have capital in excess of regulatory requirements. As our month-to-date metrics show, FXCM continues to be a global leader in retail FX with volumes on pace to set a record. We are especially thankful for our customers' loyalty and support," said Drew Niv CEO of FXCM.

Niv continued, "The financing we received from Leucadia has strengthened our balance sheet and gives us the opportunity to grow our core business while reducing our debt through the sale of non-core assets. We anticipate that the proceeds from these sales and continued earnings, we can meet both near and long term obligations of our financing, while preserving the strength of our franchise."

Richard B. Handler, Chief Executive Officer, and Brian P. Friedman, President of Leucadia, commented: "We view FXCM as our next opportunity to work with an investee company to create long-term value for all stakeholders, including FXCM's dedicated employees and customers. We look forward to assisting Drew Niv and his team to develop the liquidity opportunities to repay last week's emergency financing and then, as the long-term investors we are, to exercising the patience and diligence needed to maximize the value of FXCM over time as we strive to do for every investment in our portfolio, many of which we have held for the long term, and, in some cases, for over a decade."

*Amount excludes volume generated by clients with negative balances following the Swiss National Bank's decision to abandon the maximum exchange rate of 1.2 Swiss Francs per Euro.

Full statement: FXCM Provides Business Update (NYSE:FXCM)
As our CEO Drew mentioned, thank you to our traders for your continued support. I appreciate your patience while we work on answers to your most pressing questions, and I will continue to provide more information as I am able to.

Have a great weekend!

Jason

If you have questions about our services at FXCM please send me a Private Message.
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  #107 (permalink)
 srgtroy 
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I'm rooting for you guys because I think you have done great things to open up the retail forex market. That said, and as someone looking in from the outside, I think pursuing the negative balance thing is a big mistake, especially after saying that in general, you wouldn't do that. You've built up an excellent name over time, don't trash it. Consider yourselves lucky to have survived the Swiss Franc tsunami, rebuild, and move on...

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  #108 (permalink)
 Big Mike 
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srgtroy View Post
I'm rooting for you guys because I think you have done great things to open up the retail forex market. That said, and as someone looking in from the outside, I think pursuing the negative balance thing is a big mistake, especially after saying that in general, you wouldn't do that. You've built up an excellent name over time, don't trash it. Consider yourselves lucky to have survived the Swiss Franc tsunami, rebuild, and move on...

My gut feeling is maybe 10% of the customers make up 90% of the losses.

I could be way off. But if correct, they are probably making a blanket statement per the agreement of the rescue, to try and go after those big accounts.

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  #109 (permalink)
 srgtroy 
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My gut feeling is maybe 10% of the customers make up 90% of the losses.

I could be way off. But if correct, they are probably making a blanket statement per the agreement of the rescue, to try and go after those big accounts.

Sent from my phone

I agree with you that this is probably part of the rescue agreement, and if indeed it is about going after 10% to make up for 90% of losses, then it would be understandable and make sense, as it would allow them to survive which would be better for retail fx in general. In that case, Leucadia should have the good sense to allow them to make that case...

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  #110 (permalink)
 Big Mike 
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Another Bailout: FXCM To Forgive 90% Of Its Mostly Foreign "Negative Balance" Customers | Zero Hedge

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  #111 (permalink)
 Jason Rogers 
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srgtroy View Post
I'm rooting for you guys because I think you have done great things to open up the retail forex market. That said, and as someone looking in from the outside, I think pursuing the negative balance thing is a big mistake, especially after saying that in general, you wouldn't do that. You've built up an excellent name over time, don't trash it. Consider yourselves lucky to have survived the Swiss Franc tsunami, rebuild, and move on...

Thanks srgtroy, here's our statement from earlier this morning:
FXCM to Forgive Majority of Clients Who Incurred Negative Balances

NEW YORK, Jan. 28, 2015 (GLOBE NEWSWIRE) -- FXCM Inc. (NYSE:FXCM), announced today its decision to forgive approximately 90% of its clients who incurred negative balances in certain jurisdictions, on January 15, 2015 as a result of the Swiss National Bank announcement on that date. FXCM will notify the applicable clients and adjust applicable client account statements in the next 24-48 hours. "FXCM worked diligently to reach this decision and we are extremely appreciative of our clients for their patience and loyalty as we worked through this," said Drew Niv, CEO of FXCM.

The SNB announcement, extreme price movements and the resulting lack of liquidity were exceptional and unprecedented events causing many market participants to incur trading losses. These events were unforeseen and beyond the control of FXCM.

FXCM will also notify certain clients (such as institutional, high net worth, and experienced traders who generally maintain higher account balances) requesting payment of negative balances, pursuant to the terms of the FXCM master trading agreements. This group represents approximately 10% of clients who incurred negative balances which comprises over 60% of the total debit balances owed.

Full press release: FXCM to Forgive Majority of Clients Who Incurred Negative Balances (NYSE:FXCM)

If you have questions about our services at FXCM please send me a Private Message.
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  #112 (permalink)
 srgtroy 
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Jason Rogers View Post
Thanks srgtroy, here's our statement from earlier this morning:
FXCM to Forgive Majority of Clients Who Incurred Negative Balances

NEW YORK, Jan. 28, 2015 (GLOBE NEWSWIRE) -- FXCM Inc. (NYSE:FXCM), announced today its decision to forgive approximately 90% of its clients who incurred negative balances in certain jurisdictions, on January 15, 2015 as a result of the Swiss National Bank announcement on that date. FXCM will notify the applicable clients and adjust applicable client account statements in the next 24-48 hours. "FXCM worked diligently to reach this decision and we are extremely appreciative of our clients for their patience and loyalty as we worked through this," said Drew Niv, CEO of FXCM.

The SNB announcement, extreme price movements and the resulting lack of liquidity were exceptional and unprecedented events causing many market participants to incur trading losses. These events were unforeseen and beyond the control of FXCM.

FXCM will also notify certain clients (such as institutional, high net worth, and experienced traders who generally maintain higher account balances) requesting payment of negative balances, pursuant to the terms of the FXCM master trading agreements. This group represents approximately 10% of clients who incurred negative balances which comprises over 60% of the total debit balances owed.

Full press release: FXCM to Forgive Majority of Clients Who Incurred Negative Balances (NYSE:FXCM)

Well Done!

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  #113 (permalink)
 Jason Rogers 
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Hi Everyone,

Our CEO Drew Niv held a Q&A with Forex Magnates which will answer many questions we have received over the past couple of weeks Exclusive: FXCM Inc. CEO Drew Niv Discusses Future of the Firm and Retail Forex. Please understand that some questions I can't answer since we are a publicly traded company and it may be material information, but we will get to all questions in due time.
What happened on January 15th after the SNB announcement? What was the immediate impact of the SNB announcement on the company’s systems?

At the time of the SNB announcement over 3,000 FXCM clients held slightly over $1 billion in open positions on EUR/CHF. Those same clients held approximately $80 million of collateral in their accounts. As you know this was the largest move of a major currency since currencies started floating 1971.

The EUR/CHF move was 44 standard deviation moves, while most risk management systems only contemplate 3-6 standard deviations. The moved wiped out those clients’ account equity as well as generated negative equity balances owed to FXCM of over $225 million. We believe that the FXCM system operated properly during this event.

The caveat of our no dealing-desk execution system is that traders are offset one for one with a liquidity provider. When a client entered a EUR/CHF trade with FXCM, FXCM Inc. had an identical trade with our liquidity providers. During the historic move, liquidity became extremely scarce and shallow, which affected execution prices. This liquidity issue resulted in some clients having a negative balance.

While clients could not cover their margin call with us we still had to cover the same margin call with our banks. When a client profits in the trade FXCM gives the profits to the customer, however, when the client is not profitable on that trade FXCM Inc. ends up having to pay the liquidity provider.

FXCM ended with a regulatory capital shortfall. Accordingly, FXCM needed to get a loan to cover this balance, which it did. For anyone that still thinks FXCM is running an FX dealing desk, we have now demonstrated that such is not the case.

Why do you think many people traded EUR/CHF with FXCM?

Because we are a no dealing-desk broker and offset each trade one-for-one with our liquidity providers, and only make money on trades not customer losses. We published a study a few years ago called “traits of successful traders” that looked at FXCM traders over a long period of time and their general behavior to find what was destructive behavior to stay away from and what worked for clients.

The study focuses on what the majority of profitable traders did to increase their odds of success. What the study found was that traders who traded during quiet range-bound market hours like Asian hours OR that traded rang- bound low volatility currency pairs tended to be more profitable.

Obviously many of our competitors who are on the opposite side of their clients’ trades did not find this trade to be helpful to their bottom line, as they lose money when traders profit. We saw many of the dealing desk firms begin to increase overnight rollover cost as well as raise margin requirements to get these trades off their system and that’s why FXCM and other STP brokers had much bigger exposure.

Why did FXCM require an emergency loan with such tough terms?

As a regulated broker we are required to notify our regulators in a timely manner when any event occurs that may be deemed sensitive to clients. When we notified the regulators, they required FXCM Inc.’s regulated entities to supplement their respective net capital on an expedited basis.

We explored multiple debt and equity financing alternatives in an effort to meet the regulator’s deadline. The deal we ended up doing with Leucadia was the only deal that could and would happen in the very short timeframe we were given by the regulators. The CEO and the president of Leucadia were here in the office working on the deal.

It was a tall order for someone outside of the FX industry to come in and write a $300 million dollar check. This was the type of thing only top management could do. But they see the sustainability of FXCM, and that was everyone’s end goal. We really are very thankful to Leucadia. The deal enables us to live and fight another day and gives us time to build shareholder value in the future.

You said you plan to pay back the loan with proceeds from sales of non-core assets so what are non-core assets and will that be enough?

We announced last week that we anticipate that with the proceeds from the sale of some non-core assets and continued earnings we can meet both near and long-term obligations of our financing, while preserving the strength of our franchise. It’s widely known and understood that FXCM’s core business has always been retail FX; It is the majority of FXCM’s revenue.

However, over the past few years, the company has spent over $250 million dollars making strategic acquisitions building up our non-core businesses, mainly the institutional side as we tried to diversify the firm. We are now looking to sell some of those non-core assets; But, we are not in a rush and are looking to get the highest valuations for these assets.

We are considering closing or selling smaller regulated entities that require large sums of capital requirements, but that offer increasingly low return on capital. The latter move allows us to free up significant amounts of cash that is currently trapped. We believe that in the near term we can pay down a majority of the loan. That’s our goal.

What happens after 90 days according to your agreement with Leucadia?

The agreement says we need to pay back $50 million of the loan along with $10 million in fees in 90 days. If we don’t pay that $60 million, we will be assessed an additional $30 million in fees when the loan is due in 2017. So we are going to pay our $60 million and hopefully more in 90 days and then go from there. To be clear, the financing does not force us to do anything at 90 days.

Will you be selling FXCM?

I absolutely do not plan on selling FXCM. Like I said we will be selling non-core assets but no I don’t plan on selling FXCM. That is also why we implemented the shareholder rights plan to prevent a hostile takeover. FXCM has been independent for over 15 years and we intend to stay that way.

Are client funds safe with FXCM?

Yes. As we have said, we believe FXCM’s systems operated properly during this event. I’ll stress it here again, FXCM is not insolvent, has not filed for any form of bankruptcy, and is in compliance with all regulatory capital requirements in the jurisdictions in which it operates. The financing we received from Leucadia has strengthened our balance sheet and gives us the opportunity to grow our core business. With Leucadia, our pockets are even deeper and we aren’t going anywhere. Additionally, all of our regulated entities except the U.S. provide clients with segregated funds. All of our global client base in our regulated entities minus US clients would be protected under a bankruptcy. Our UK regulated entity through the FSCS even offers clients £50,000 per person in protection. Canada has similar insurance for retail traders of up to $1 million CAD.

What are the relationships like with your liquidity providers after this event?

Many of these relationships are long-standing relationships. The entire industry took a hit here. They understand what happened. Most everyone halted trading in EUR/CHF, but half of our liquidity providers kept providing prices in all other pairs the entire time. Half of the LPs did stop pricing FXCM on Friday January 16th, but most have returned. We presently only have two providers that have not yet returned, but we are optimistic that they will soon return. There is still plenty of liquidity on the platform. Most banks and other liquidity providers have been
working very closely with the FXCM team.

Where do you see FXCM in six months from now?

We will be well on our way to paying down the loan and continue to grow our core franchise. FXCM still has the best platform for retail traders, we still provide the fairest and more transparent execution in the business and we have a slew of new trading indicators and applications that no one in the space is even considering offering their clients. We’ll still be here; We may just look a little different. Here are a few things we are working to get out in the next six months:

Single Share CFDs – We are going to be offering the top 200 or so most traded US, UK, French and German stocks. We are going to offer these shares on the equivalent of NDD in FX.

Improving CFD execution – Sharpening execution capabilities to match some of the benefits of our FX capabilities for Index and Energy CFDs to remove restrictions on stops and limits, allowing APIs, along with tighter spreads.

Market Depth in FX – clients will be able to see the depth of liquidity which will provide them more transparency with execution quality and allow them to make more informed trading decisions.

Real Volume indicators – clients will have a real volume ticker of all trades done on the FXCM system, which will show clients’ actual order flow; they can see directional volume, so long, short, net or total volume as well as balance on volume per instrument; and finally we have an indicator to show the ratio of real volume divided into transactions per period. These indicators will let clients compare our trading activity against other independent providers who also publish volumes like the CME, and clients will be able to compare execution.

Sentiment Index – We will be providing FXCM’s client sentiment data in real-time as a default on the platform so clients can see where the rest of the clients are.

These software updates and platform features are bringing much more transparency to the retail FX market aimed at improving the client experience in the market.

With your stock price so low, is that an indication of the health of your company?

While it is true that FXCM’s stock price dropped after the events of January 15th, we do not believe that the present stock price is indicative of the health of the company. The stock price does not impact our day to day operations as a company.
With the injection of cash from the Leucadia financing, the core retail business is functioning completely as normal. We have excess regulatory capital in all our regulated entities and never had to pause trading or interrupt client’s trading experience. As we announced in our business update, daily volume on the retail side was on pace to set an all-time company record.

Why didn’t the dealing desk brokers have these types of losses?

A dealing desk broker does not have offsetting trades. If the customer is long a trade the broker is short that trade, so when the customer makes a profit on a trade the broker loses. When the customer loses on the trade then the broker is profitable.

Obviously on January 15th most clients lost money so the dealer was very profitable. Even for clients that blew through their stops and had negative balances with these firms, the dealer doesn’t have a liquidity provider that it owes money to. They can essentially act like the negative balances never happened and enjoy their profits.

What is FXCM changing with regards to their risk management systems?

The primary change we will be making is removing currency pairs from the platform that carry significant risk due to over-active manipulation by their respective government either by a floor, ceiling, peg or band. Given what happened with EUR/CHF the industry is now looking very hard at any potentially similar issues, especially given the increased geopolitical risks in Southern and Eastern Europe.

We will also be raising margin requirements for other pairs as well. Some of these changes will be permanent while others may change as geopolitical risks change. The pairs we are removing from the platform were not material to our volume or our revenue. Some of the currencies we are removing include DKK, SGD, HKD, PLN and CZK.

FXCM made some material changes in margin requirements for clients. Are those changes permanent or temporary in nature?

When you look at some of the changes we made to margin requirements, look at them in three different categories: 1. Some of the changes we made were required by regulators, and therefore we had to comply with these changes. 2. When you look at emerging market currencies, the banks and our liquidity providers were raising margin requirements to eliminate any potential risk of large gaps. 3. Previously liquid Western country currencies, like the DKK or CHF, which now carry risk because they are manipulated currencies, have become less liquid.

Despite what the media thinks about leverage, we know the clients like it and want more, it’s the number 1 or number 2 request our sales staff has been getting the past week. We understand the importance of this to our clients but we just need to be smart about it moving forward.

What is Black Thursday’s long-term impact on the retail foreign exchange industry? In what ways has it changed the direction the industry is going?

Banks are raising their margin requirements, too. A lot of these currencies that carry any type of geopolitical risk with them are going to lose support and liquidity. Investors always had little faith in emerging market currencies but always believed in Western countries’ currencies even if they were manipulated in some way, but that’s gone.

Switzerland is a Western country and if they can pull the shenanigans they did with their currency, what’s to say other western countries won’t do the same? The market is going to be very sceptical as they can only stand to lose; The risk is just too high now. It’s too bad really as these pairs historically had low volatility, were range-bound and were very profitable trades for clients.

- See more at: Exclusive: FXCM Inc. CEO Drew Niv Discusses Future of the Firm and Retail Forex

If you have questions about our services at FXCM please send me a Private Message.
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  #114 (permalink)
 dwt51 
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"The EUR/CHF move was 44 standard deviation moves, while most risk management systems only contemplate 3-6 standard deviations."

Swans don't get much blacker than that.

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  #115 (permalink)
 zanoza 
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what will happen to company now?is it safe to open an account or it better to stay away for now? thank you

 
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  #116 (permalink)
 Jason Rogers 
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zanoza View Post
what will happen to company now?is it safe to open an account or it better to stay away for now? thank you

Hi zanoza,

As our CEO Drew Niv mentioned in the Q&A above: 'With the injection of cash from the Leucadia financing, the core retail business is functioning completely as normal. We have excess regulatory capital in all our regulated entities and never had to pause trading or interrupt client’s trading experience.'

Our customer support team is available 24 hours a day by phone or live chat if you have any questions about opening a live account.

Jason

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 chr1s 
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Hi @Jason Rogers,

I have a quick question about NinjaTrader and spread betting - in LOD (Service Provider Letter of Direction) in terms and conditions there is point 4 stating (My Program being NT):


Quoting 
4. In consideration for my use of My Program, I hereby authorise my account to be debited in the following amounts:
A monthly fee of $60 is charged and is payable to the Program Provider.

Having a lifetime multibroker licence for NT7 what is this fee for? There is no lease option for NT7 which is worth $60. Your colleagues from custom support have admitted that a customer with existing licence will not be charged and it is a mistake and thanked for pointing it out, but I can see it still hasn't been changed. Can you advise on this matter please?

Thank you
Chris

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 Joseph689 
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I read the entire thread, and ohhhh boy was I shocked at the ending!!

I was seriously thinking of coming over from IB with 10,000. to start trading Forex, now??

Lets assume the worst thing that can happen, happens to FXCM, will clients lose their funds? Just a "yes" or "no" please!

On a difrent note; "Server-side OCO order functionality comes built into FXCM's Trading Station platform but is not available by default with NinjaTrader" Is this still the case?

Thanks.
Joseph

 
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 Jason Rogers 
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chr1s View Post
Hi @Jason Rogers,

I have a quick question about NinjaTrader and spread betting - in LOD (Service Provider Letter of Direction) in terms and conditions there is point 4 stating (My Program being NT):



Having a lifetime multibroker licence for NT7 what is this fee for? There is no lease option for NT7 which is worth $60. Your colleagues from custom support have admitted that a customer with existing licence will not be charged and it is a mistake and thanked for pointing it out, but I can see it still hasn't been changed. Can you advise on this matter please?

Thank you
Chris

Hi Chris,

A letter of direction (LOD) form is no longer needed to set up a NinjaTrader account with FXCM. As long as your have a Trading Station account with hedging disabled, then you can get a key from NinjaTrader to trade that account with their platform. Since you have a lifetime multibroker license with them, that key should be free. Would you prefer to set up a new FXCM account to work with NinjaTrader or to convert an existing account?

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 Jason Rogers 
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Lets assume the worst thing that can happen, happens to FXCM, will clients lose their funds? Just a "yes" or "no" please!

Hi Joseph,

All of our regulated entities except the U.S. provide clients with segregated funds. All of our global client base in our regulated entities minus US clients would be protected under a bankruptcy. Our UK regulated entity through the FSCS even offers clients £50,000 per person in protection. Canada has similar insurance for retail traders of up to $1 million CAD.

Note that it is US regulations that prohibit forex trading accounts in the country from having segregated funds status in bankruptcy proceedings. That makes knowing the financial details of your broker even more important if you live in the US.

Since we are a publicly-traded company (ticker: FXCM), details regarding our financials are readily available and updated every quarter on our website. The next quarterly update is scheduled for March. In the meantime, I can confirm that FXCM is in compliance with all regulatory capital requirements in the jurisdictions in which we operate. (In fact, we are one of the only retail forex brokers in the world that is regulated on four continents.) That means trading, deposits and withdrawals continue as normal. The financing we received from Leucadia has strengthened our balance sheet and gives us the opportunity to grow our core business. With Leucadia, our pockets are even deeper and we aren’t going anywhere.

We anticipate that with the proceeds from the sale of some non-core assets and continued earnings we can meet both near and long-term obligations of our financing, while preserving the strength of our franchise. It's widely known and understood that FXCM's core business has always been retail FX; It is the majority of our revenue. Earlier this month, we announced certain key operating metrics for January 2015 as we do every month as a publicly-traded company. The data show that it was our second best month ever in terms of retail volume.

However, over the past few years, the company has spent over $250 million dollars making strategic acquisitions building up our non-core businesses, mainly the institutional side as we tried to diversify the firm. We are now looking to sell some of those non-core assets; But, we are not in a rush and are looking to get the highest valuations for these assets. We are considering closing or selling smaller regulated entities that require large sums of capital requirements, but that offer increasingly low return on capital. The latter move allows us to free up significant amounts of cash that is currently trapped. We believe that in the near term we can pay down a majority of the loan.


Joseph689 View Post
On a difrent note; "Server-side OCO order functionality comes built into FXCM's Trading Station platform but is not available by default with NinjaTrader" Is this still the case?

Thanks.
Joseph

Yes, for server-side OCO functionality on your FXCM account, you must use the Trading Station platform. It's worth noting that if you have a NinjaTrader account with FXCM, then you can use the same login details to trade that account through Trading Station. That means, you could place server-side OCO orders via Trading Station while still using NinjaTrader for other functionality.

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 chr1s 
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Hi Chris,

A letter of direction (LOD) form is no longer needed to set up a NinjaTrader account with FXCM. As long as your have a Trading Station account with hedging disabled, then you can get a key from NinjaTrader to trade that account with their platform. Since you have a lifetime multibroker license with them, that key should be free. Would you prefer to set up a new FXCM account to work with NinjaTrader or to convert an existing account?

Hi Jason,

Thank you for you reply.

I would like to open a fresh new spread betting account where I can use NT7 to trade, the webpage is not updated:


Please correct me if I'm wrong - having multibroker lifetime licence for NT7 I do not have to fill in LOD when applying for a new spread betting account with FXCM. I can use my own multibroker licence to trade with NT7 from that account.

Thank you
Chris

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 Joseph689 
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Mr. Rogers,

I believe in simplicity and straight forward answers; after all, it is our money at stake.

On my First question, "Lets assume the worst thing that can happen, happens to FXCM, will clients lose their funds? Just a "yes" or "no" please!"
The answer here is a simple "YES", since I live in the US and don't enjoy the same protection when it comes to FOREX, against the filling of bankruptcy as other countries do!

The fact you are a publicly traded company has nothing to do with the fact that you can file for protection under the federal bankruptcy at anytime, and we, US clients are out in the cold.

I'm sorry, but I'm not willing to take that risk, especially with the latest FXCM is going through.

-Joseph

 
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 Jason Rogers 
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The fact you are a publicly traded company has nothing to do with the fact that you can file for protection under the federal bankruptcy at anytime, and we, US clients are out in the cold.

The concerns you have raised would apply to any US brokerage, since segregated funds and insurance are not available for forex accounts under US regulations. The fact that FXCM is a publicly-traded firm is relevant, because it means we provide details regarding our financials that are not readily available from the privately-held companies that operate as forex brokers in the US.

Furthermore, that fact that we are one of the only retail forex brokers in the world that is regulated on four continents means we are subject to even more oversight than the average international forex broker. And as mentioned in my previous post, FXCM is in compliance with all regulatory capital requirements in the jurisdictions in which we operate. The financing we received from Leucadia has strengthened our balance sheet and gives us the opportunity to grow our core business. With Leucadia, our pockets are even deeper and we aren’t going anywhere.

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 Jason Rogers 
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chr1s View Post
Please correct me if I'm wrong - having multibroker lifetime licence for NT7 I do not have to fill in LOD when applying for a new spread betting account with FXCM. I can use my own multibroker licence to trade with NT7 from that account.

Thank you
Chris

That's correct. Instead of completing the LOD, simply contact NinjaTrader support after receiving your new FXCM account number, and they should be able to set up access to the account for you through their platform.

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 chr1s 
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Jason Rogers View Post
That's correct. Instead of completing the LOD, simply contact NinjaTrader support after receiving your new FXCM account number, and they should be able to set up access to the account for you through their platform.

Great, thank you

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 Jason Rogers 
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zanoza View Post
what will happen to company now?


Joseph689 View Post
I was seriously thinking of coming over from IB with 10,000. to start trading Forex, now??

Lets assume the worst thing that can happen, happens to FXCM, will clients lose their funds? Just a "yes" or "no" please!


Jason Rogers View Post
The financing we received from Leucadia has strengthened our balance sheet and gives us the opportunity to grow our core business. With Leucadia, our pockets are even deeper and we aren’t going anywhere.

We anticipate that with the proceeds from the sale of some non-core assets and continued earnings we can meet both near and long-term obligations of our financing, while preserving the strength of our franchise. It's widely known and understood that FXCM's core business has always been retail FX; It is the majority of our revenue. Earlier this month, we announced certain key operating metrics for January 2015 as we do every month as a publicly-traded company. The data show that it was our second best month ever in terms of retail volume.

However, over the past few years, the company has spent over $250 million dollars making strategic acquisitions building up our non-core businesses, mainly the institutional side as we tried to diversify the firm. We are now looking to sell some of those non-core assets; But, we are not in a rush and are looking to get the highest valuations for these assets. We are considering closing or selling smaller regulated entities that require large sums of capital requirements, but that offer increasingly low return on capital. The latter move allows us to free up significant amounts of cash that is currently trapped. We believe that in the near term we can pay down a majority of the loan.

Just as a follow up to my earlier post, here's an article in today's Wall Street Journal where Leucadia confirms that they have begun to receive payments from us and expect to recover more than a quarter of their investment within three months of the deal's closing: Leucadia Begins Recovering FXCM Investment - WSJ

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 Joseph689 
San Jose, Ca
 
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Hello,

I'm trying to setup a "Practice Account" and when I click on the Submit bar it highlights but doesn't submit my data.

Did you guys disable Practice Accounts?

Thanks.

Joseph

 
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 Jason Rogers 
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Joseph689 View Post
Hello,

I'm trying to setup a "Practice Account" and when I click on the Submit bar it highlights but doesn't submit my data.

Did you guys disable Practice Accounts?

Thanks.

Joseph

Hi Joseph,

The practice account registration form has not been disabled. Can you copy/paste the page URL on which you are trying to register for the practice account so we can try from our side.

Thanks,

Jason

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 Joseph689 
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Jason Rogers View Post
Hi Joseph,

The practice account registration form has not been disabled. Can you copy/paste the page URL on which you are trying to register for the practice account so we can try from our side.

Thanks,

Jason

Hi Jason,
The process worked and I have a practice account now. What happened was, once the Submit button was pressed, there was no acknowledgment/message/landing page of info having been submitted successfully.
Thanks for the response Jason.
Joseph

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 Joseph689 
San Jose, Ca
 
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Can you please explain the event(s) of 6th of March, around 12:30 as well as further back into the chart; spikes that "appear" to be "stop hunting/harvesting" by FXCM!!??

These events were NOT present on other major brokers charts!!

I've attached firstly a FXCM chart, followed by several other brokers charts as well, including ATC.

I would very much like to hear FXCM's official explanation of these occurrences, and if this is common practice.

Thanks.

Joseph

Attached Thumbnails
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 Jason Rogers 
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Joseph689 View Post
Can you please explain the event(s) of 6th of March, around 12:30 as well as further back into the chart; spikes that "appear" to be "stop hunting/harvesting" by FXCM!!??

Hi Joseph,

FXCM provides traders with NDD forex execution. While spreads can widen during news events particularly a major one like Non Farm Payrolls last Friday, it's important to understand what causes that widening and how this differs from dealing desk brokers.

At FXCM, we simply pass on the best prices we receive from competing liquidity providers. That means when spreads widen, it's because banks are widening their spreads. Note that even in that situation, you're still benefiting from the best bid price and the best ask price from those competing providers. Since we don't take the market risk on the other side of your trades, we make the same amount of money from your trading volume whether you exit your trades for a profit or a loss. In fact, we want you to be profitable, so you continue trading with us.

By contrast, with a dealing desk broker, they could be taking the market risk on the other side of your trade. That means a loss for you could be a profit for them, or a profit for you could equal a loss for them. That would incentivize them to widen their spreads to trigger your stops or to prevent your limit/take profit orders from being triggered.

You mentioned that you're currently using a demo account. It's worth noting that if you have a live account with FXCM and have any questions about the execution of a particular trade, you can file a trade inquiry. The Trade Services Team will then be able to investigate in detail and reply back to you with a resolution. If their was an error in our execution that negatively impacted your trade, we would make the appropriate correction to your account.

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 Joseph689 
San Jose, Ca
 
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So, Jason, basically what you are saying is, FXCM and it's liquidity providers are pricing the market where no one else is??!!

 
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 Jason Rogers 
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Joseph689 View Post
So, Jason, basically what you are saying is, FXCM and it's liquidity providers are pricing the market where no one else is??!!

Hi Joseph,

What I said was that spreads can increase for legitimate reasons during a news event like NFP. At FXCM, we do not profit from client losses on our NDD forex execution, so we have no incentive to hunt stops. We simply pass on the best prices we receive from competing liquidity providers. While I can't investigate individual trades or price ticks here, the Trade Services Team exists for precisely that purpose. Our clients can request an investigation of any trade on their account by filing a trade inquiry. If there was an error in our execution, FXCM will make the appropriate correction.

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 chr1s 
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Jason Rogers View Post
our NDD forex execution

Hi Jason,

just a technicality - can you please confirm that all CFD and spread betting accounts are no dealing desk and all executions are NDD please?

Thank you
Chris

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 jodistrict 
san diego
 
Experience: Intermediate
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I tried downloading a demo of FXCM that works with NinjaTrader and so far have been unsuccessful in getting it to connect. The chat help has been useless in providing a solution. Does anyone use FXCM with ninjatrader? How does it work?

 
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 Joseph689 
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jodistrict View Post
I tried downloading a demo of FXCM that works with NinjaTrader and so far have been unsuccessful in getting it to connect. The chat help has been useless in providing a solution. Does anyone use FXCM with ninjatrader? How does it work?

Try this:

HTML Code:
http://www.ninjatrader.com/ConnectionGuides/FXCM-Connection-Guide.php

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 chr1s 
London, England
 
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Hi @Joseph689, @jodistrict

I found some issues with the latest version .27 - no problems with .25 though (don't know about .26)

--edit--
tested .26 and everything is fine

cheers
Chris

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 Jason Rogers 
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chr1s View Post
Hi Jason,

just a technicality - can you please confirm that all CFD and spread betting accounts are no dealing desk and all executions are NDD please?

Thank you
Chris

Hi Chris,

While FXCM offers traders NDD execution for forex, CFD trading (and spread betting on stock indices, metals and energy products) is on DD. We are exploring options to offer NDD for more products in the future, but there is no ETA at this time. As with forex, there are no re-quotes when trading CFDs with FXCM.

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 chr1s 
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Jason Rogers View Post
Hi Chris,

While FXCM offers traders NDD execution for forex, CFD trading (and spread betting on stock indices, metals and energy products) is on DD. We are exploring options to offer NDD for more products in the future, but there is no ETA at this time. Stills with forex, there are no re-quotes when trading CFDs with FXCM.

Thanks Jason, so in essence any forex currency via anything (including spread betting) is NDD.

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 Joseph689 
San Jose, Ca
 
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Jason,

Do the charts follow the "New York close"?

Five daily bars weekly, no Sunday bar?

What time zone are the charts on?

On MT4, does a new daily bar start with the Asian open?

I'm assuming the above replies apply to ATC Broker as well, since they use the same data feed?

Thanks Jason.
Joseph

 
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 Jason Rogers 
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chr1s View Post
Thanks Jason, so in essence any forex currency via anything (including spread betting) is NDD.

That's correct, Chris

FXCM offers traders NDD forex execution on both spread betting and non-spreading accounts. However, non-forex instruments such as stock indices, metals and energy products are offered via DD execution with no re-quotes.

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 Jason Rogers 
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Joseph689 View Post
Jason,

Do the charts follow the "New York close"?

Five daily bars weekly, no Sunday bar?

What time zone are the charts on?

On MT4, does a new daily bar start with the Asian open?

I'm assuming the above replies apply to ATC Broker as well, since they use the same data feed?

Thanks Jason.
Joseph

Hi Joseph,

FXCM's Trading Station platform offers New York Close charts for all accounts. With our MT4 platform, accounts denominated in USD, AUD and NZD have New York Close charts. That means a new daily bar starts at 5pm New York Time. There are five daily bars weekly and no Sunday bar.

By contrast, our MT4 servers for GBP and EUR accounts are set to GMT, so they do have a Sunday bar. Your forum profile mentions that you live in the US, so I imagine you would want an account denominated in USD.

While many brokers clear trades through FXCM, you would have to ask them directly about how their platforms and charts are set up, as this could vary.

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 chr1s 
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Jason Rogers View Post
That's correct, Chris

FXCM offers traders NDD forex execution on both spread betting and non-spreading accounts. However, non-forex instruments such as stock indices, metals and energy products are offered via DD execution with no re-quotes.

Thank you

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 Joseph689 
San Jose, Ca
 
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Jason 2 questions please?

You mentioned that traders funds are kept separate from FXCM daily operational expenses, is this correct?

The above being correct, and assuming the worse in that FXCM files for bankruptcy. Would the traders funds be frozen as well and be part of the bankruptcy proceedings? Or, would we be able to withdraw our funds at anytime after the bankruptcy is initiated?

Latest FXCM news, "In order to optimize its RPM, FXCM Inc (NYSE:FXCM) has announced that it will be returning the dealing desk model for clients with equity below $20,000"

Can you please comment on the above latest news release?

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 pvlee 
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Jason Rogers View Post
That's correct, Chris

FXCM offers traders NDD forex execution on both spread betting and non-spreading accounts. However, non-forex instruments such as stock indices, metals and energy products are offered via DD execution with no re-quotes.

That is disappointing

 
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 Cogito ergo sum 
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Probably worth sharing here...

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 Joseph689 
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Hello Jason,
You were probably too busy to reply to my questions of March 13th, so I figured I would help out.

Legal Disclosure
Required NFA Disclosure

The transactions you are entering into with FXCM are not traded on an exchange. Therefore, under the U.S. Bankruptcy Code, your funds may not receive the same protections as funds used to margin or guarantee exchange-traded futures and options contracts, which receive a priority in bankruptcy. Since that same priority has not been given to funds used for off-exchange forex trading, if FXCM becomes insolvent and you have a claim for amounts deposited or profits earned on transactions with FXCM, your claim may not receive a priority. Without a priority, you are a general creditor and your claim will be paid, along with the claims of other general creditors, from any monies still available after priority claims are paid. Even customer funds that FXCM keeps separate from its own operating funds may not be safe from the claims of other general and priority creditors.

So the answer to my original question,"You mentioned that traders funds are kept separate from FXCM daily operational expenses, is this correct? The above being correct, and assuming the worse in that FXCM files for bankruptcy. Would the traders funds be frozen as well and be part of the bankruptcy proceedings? Or, would we be able to withdraw our funds at anytime after the bankruptcy is initiated? "

The answers are:
1) YES, a traders funds would be frozen during Chapter 11 proceedings.
2) NO, a trader would not be able to withdraw his/her funds once Chapter 11 proceedings have begun.

So this would not only apply to trading account at FXCM, but at ATC Brokers as well, since all funds would be deposited and controlled by FXCM.

 
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 Jason Rogers 
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Joseph689 View Post
You mentioned that traders funds are kept separate from FXCM daily operational expenses, is this correct?

The above being correct, and assuming the worse in that FXCM files for bankruptcy. Would the traders funds be frozen as well and be part of the bankruptcy proceedings? Or, would we be able to withdraw our funds at anytime after the bankruptcy is initiated?

Hi Joseph,

It's worth noting that FXCM is in compliance with all regulatory capital requirements in the jurisdictions in which we operate. Additionally, all of our regulated entities except the US provide clients with segregated funds. All of our global client base in our regulated entities minus US clients would be protected under a bankruptcy. Our UK regulated entity through the FSCS even offers clients £50,000 per person in protection. Canada has similar insurance for retail traders of up to $1 million CAD.

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 Jason Rogers 
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Joseph689 View Post
So the answer to my original question,"You mentioned that traders funds are kept separate from FXCM daily operational expenses, is this correct? The above being correct, and assuming the worse in that FXCM files for bankruptcy. Would the traders funds be frozen as well and be part of the bankruptcy proceedings? Or, would we be able to withdraw our funds at anytime after the bankruptcy is initiated? "

The answers are:
1) YES, a traders funds would be frozen during Chapter 11 proceedings.
2) NO, a trader would not be able to withdraw his/her funds once Chapter 11 proceedings have begun.

So this would not only apply to trading account at FXCM, but at ATC Brokers as well, since all funds would be deposited and controlled by FXCM.

What you have said would actually apply to any US forex trading account regardless of the broker due to how such accounts are regulated by the government. With that in mind, below are the latest net capital figures for US retail forex brokers as reported to the CFTC.


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 Jason Rogers 
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pvlee View Post
That is disappointing

Hi Pvlee,

I understand your concerns, and you are correct to point out the potential conflicts of interest that can exist with the DD model. By taking the market risk on the other side of your trades, dealing desk brokers can profit from your losses or lose from your profits. While our CFD execution is DD like most of the industry, there are no re-quotes which can be a problem traders may experience with other brokers.

FXCM believes the No Dealing Desk (NDD) model is the most fair and transparent to provide to traders which is why we have offered NDD forex execution since 2007. That was when we were able to convince our forex liquidity providers to offset individual client orders as small as one mini lot. In 2012, we extended our NDD forex execution to include micro lot orders.

While we haven't yet been able to set up such an NDD arrangement with our CFD liquidity providers for the order sizes our clients demand (we offer micro lot CFD trading), it is a long term goal of ours to offer this in the future.

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 Joseph689 
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Jason Rogers View Post
What you have said would actually apply to any US forex trading account regardless of the broker due to how such accounts are regulated by the government. With that in mind, below are the latest net capital figures for US retail forex brokers as reported to the CFTC.


Jason,
What you said above is absolutely true, BUT, no other US retail broker is under the gun to pay back $300 million like FXCM is!!

 
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 Jason Rogers 
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Jason,
What you said above is absolutely true, BUT, no other US retail broker is under the gun to pay back $300 million like FXCM is!!

Hi Joseph,

You raise a good point. Since we are a publicly-traded company (NYSE ticker: FXCM) the details of our loan from Leucadia are well known. In fact, in our most recent quarterly earnings presentation, we clearly outlined how we plan to repay this debt. By contrast, most other forex brokers are privately-held companies, so it's hard to know how much debt they have on their books or the state of their finances.

Over the past few years, FXCM has spent over $250 million dollars making strategic acquisitions building up our non-core businesses, mainly the institutional side as we tried to diversify the firm. We are now looking to sell some of those non-core assets; But, we are not in a rush and are looking to get the highest valuations for these assets.




We are considering closing or selling smaller regulated entities that require large sums of capital requirements, but that offer increasingly low return on capital. The latter move allows us to free up significant amounts of cash that is currently trapped. We believe that in the near term we can pay down a majority of the loan. That’s our goal.

Despite the events of January 15th and the debit balances that resulted from the Swiss Franc movements, FXCM today remains in a strong competitive position:
  • $303 million in consolidated operating cash
  • $1.0 billion in customer equity
  • 195,000 active retail FX accounts
  • Global regulatory capital of $252 million versus $93 million minimum requirements (an excess of $159 million)

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 Jason Rogers 
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Latest FXCM news, "In order to optimize its RPM, FXCM Inc (NYSE:FXCM) has announced that it will be returning the dealing desk model for clients with equity below $20,000"

Can you please comment on the above latest news release?

Given what happened with EUR/CHF, the industry is now looking very hard at any potentially similar issues, especially given the increased geopolitical risks in Southern and Eastern Europe. The primary change FXCM has made is to remove currency pairs from our platform that carry significant risk due to over-active manipulation by their respective government either by a floor, ceiling, peg or band. We also raised margin requirements for other pairs as well. Some of these changes will be permanent while others may change as geopolitical risks change.

FXCM believes that No Dealing Desk (NDD) forex execution is the most fair and transparent to provide to traders and will continue to offer it. However, we have received demand for higher leverage (lower margin requirements) particularly from traders in emerging markets where the average account balance is smaller. Offering these traders the choice of a dealing desk option in the future in addition to our existing NDD model will allow us to cater to their demand for higher leverage from a risk management perspective. That said, we still expect the majority of traders to continue to choose our NDD model.

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 Jason Rogers 
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Over the past few years, FXCM has spent over $250 million dollars making strategic acquisitions building up our non-core businesses, mainly the institutional side as we tried to diversify the firm. We are now looking to sell some of those non-core assets; But, we are not in a rush and are looking to get the highest valuations for these assets.



A few weeks ago I mentioned our goal is to repay the Leucadia loan by selling certain non-core assets, and today we have announced the first:
FXCM to Sell FXCM Japan to Rakuten Sec for $62 Million

NEW YORK, March 25, 2015 (GLOBE NEWSWIRE) -- FXCM Inc. (NYSE:FXCM) a leading online provider of foreign exchange (FX) trading and related services, today announced that FXCM Holdings, LLC and FXCM Newco, LLC ("FXCM") have signed a definitive agreement to sell FXCM Japan Securities Co., Ltd ("FXCM Japan") to Rakuten Securities, Inc. ("Rakuten Sec"), a top 5 FX broker in Japan, and a subsidiary of Rakuten, Inc. ("Rakuten") (TOKYO:4755), one of the world's largest Internet services companies, for a purchase price of approximately $62 million.

Read full press release: FXCM to Sell FXCM Japan to Rakuten Sec for $62 Million (NYSE:FXCM)

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 Jason Rogers 
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Jason Rogers View Post
Over the past few years, FXCM has spent over $250 million dollars making strategic acquisitions building up our non-core businesses, mainly the institutional side as we tried to diversify the firm. We are now looking to sell some of those non-core assets; But, we are not in a rush and are looking to get the highest valuations for these assets.




We are considering closing or selling smaller regulated entities that require large sums of capital requirements, but that offer increasingly low return on capital. The latter move allows us to free up significant amounts of cash that is currently trapped. We believe that in the near term we can pay down a majority of the loan. That’s our goal.

Today we announced another update related to this:

FXCM Pays Additional $54 Million Owed to Leucadia

Avoids Contingent Financing Fee of $30 Million

NEW YORK, April 2, 2015 (GLOBE NEWSWIRE) -- FXCM Inc. (NYSE:FXCM) a leading online provider of foreign exchange (FX) trading and related services, today announced that it has repaid an additional $54 million outstanding under its credit agreement with Leucadia. The payment was funded in part with proceeds from the sale of FXCM Japan. FXCM has now repaid $66 million under the credit agreement, and as of April 1, 2015, FXCM's outstanding Leucadia loan balance is $244 million.

By repaying more than $60 million before April 16, 2015, FXCM has avoided a contingent financing fee of $30 million, and FXCM shareholders stand to benefit from an improved sharing determination of proceeds from future asset sales, dividends and distributions pursuant to the terms of the credit agreement.

"FXCM is pleased with how our debt reduction plan is proceeding," said Drew Niv, CEO of FXCM. "We are ahead of plan and the results of the FXCM Japan sale exceeded our expectations. With all the increased attention to our other properties, we are expecting robust and competitive auctions for the other non-core assets we have targeted to sell."

Read full press release: FXCM Pays Additional $54 Million Owed to Leucadia (NYSE:FXCM)

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 Jason Rogers 
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Below are the CFD holiday trading hours for Easter and ANZAC Day. Forex trading hours remain unchanged, and you can view the holiday rollover interest schedule here: http://www.dailyfx.com/calendar/rollover_calendar?CMP=SFS-70160000000MumJAAS


Times below are in GMT

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 Jason Rogers 
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Below are the CFD holiday trading hours for Easter and ANZAC Day. Forex trading hours remain unchanged, and you can view the holiday rollover interest schedule here: http://www.dailyfx.com/calendar/rollover_calendar?CMP=SFS-70160000000MumJAAS

CORRECTION to previously listed holiday trading hours: ANZAC Day will not have any impact on AUS200 trading hours.

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 mdsvtr 
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CFD not being allowed for trading for USA residents

Hi Jason and fellow traders,
can someone please explain the reasoning behind, why CFD's are not allowed and if and when they may become available for we traders in the USA ?

This is kinda on the same playing field, as the current Online Poker situation ...... there are a few sites available, but not the big ones ( PokerStars and Full Tilt ) like it was before the big Black Friday event back in 08 / 09

 
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 Jason Rogers 
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CFD not being allowed for trading for USA residents

Hi Jason and fellow traders,
can someone please explain the reasoning behind, why CFD's are not allowed and if and when they may become available for we traders in the USA ?

This is kinda on the same playing field, as the current Online Poker situation ...... there are a few sites available, but not the big ones ( PokerStars and Full Tilt ) like it was before the big Black Friday event back in 08 / 09

Hi Michael,

Government regulations prohibit CFDs in the US. Unless that changes, no brokerage can legally offer CFD trading to US residents.

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 Big Mike 
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