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FXCM's Suhail Afzal and Brad Gleason - Ask Me Anything (AMA)
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.
If you have questions about our services at FXCM please send me a Private Message.
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.
If you have questions about our services at FXCM please send me a Private Message.
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?
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.
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.
If you have questions about our services at FXCM please send me a Private Message.
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.
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.
If you have questions about our services at FXCM please send me a Private Message.
