Archive for the 'forex brokers' Category

News came from Jaclyn, FXCM

New York, December 3, 2007 — Today, Forex Capital Markets LLC (FXCM) announced that the Refco estate agreed to sell its 35% ownership interest in FXCM to Long Ridge Equity Partners (and affiliated entities) and Lehman Brothers. The financial terms of the transaction were not disclosed.

The announcement of the sale was made today by Drew Niv, CEO of Forex Capital Markets LLC (FXCM), the Wall Street currency trader.
“We are extremely pleased with the outcome of the auction,” said Niv, “and we look forward to Lehman Brothers and Long Ridge becoming shareholders in FXCM. We believe Lehman Brothers’ expertise in the global foreign exchange market and insight into growing our business will be extremely beneficial both for our company and for our clients.”

Upon completion of the transfer of ownership:

• FXCM will no longer have any financial connection or business relationship with the Refco estate;
• Five investors, including Long Ridge FXCM, L.P. and Long Ridge FXCM Coinvestment, LLC, are purchasing 25.1%. Lehman Brothers has agreed to acquire an equity stake of 9.9%.
• The FXCM Board of Directors will be composed of seven members. Five seats will be held by original founders of FXCM and two will be held by members nominated by the new investors excluding Lehman Brothers;
• There will be no change in FXCM’s management, operations or services.
Refco Exits As A Shareholder

“As a result of the transfer of ownership, the Refco estate will have no equity stake in FXCM,” said Niv. “Replacing Refco as a shareholder will be a positive in the marketplace, enabling the industry and individual traders to focus on FXCM’s strong financial position, its growing business and its product innovations.”

No Change In Leadership Or Management

“The results of the auction will change neither the leadership nor the management of FXCM,” said Niv. “The investment being purchased constitutes a minority interest in FXCM. The original founding partners of FXCM still control a majority of 5 of the 7 seats onour Board of Directors, and will collectively make all major decisions. The new investors are fully in sync with management’s plans, so FXCM will not be making any changes in personnel, operations, or strategic direction as a result of the auction.”

A Vote Of Confidence For The No Dealing Desk Model

“The no-dealing-desk trading platform we have developed allows currency traders to receive prices provided to FXCM, from some of the world’s largest banks, who, offer us some of the most favorable rates. We believe this business model points the way for all retail currency trading in the future,” said Niv.

Well, its always nice of Jaclyn to send updates of their brokerage firm to us to update our users (win-win situation). I do encourage any forex firms who wish to share with us on their latest offer to email me (free publication for you! more information for our readers) anytime.

FXCM Group Balance Sheet

The FXCM Group has released its latest balance sheet. The numbers reflect the group’s financial strength and status as of August 31, 2007. Highlights include:

• Over $120 Million in Capital* (Assets Minus Liabilities)
• Over $96 Million In Operating Cash (Excludes Client Funds)

This release marks the second time this year that the forex broker has publicly disclosed its financials. FXCM believes that financial transparency in the retail forex industry is more important than ever in light of the NFA’s new financial requirements. Furthermore, we challenge other forex firms to follow our example.

Drew Niv, CEO of the trading firm, commented: “FXCM is proud of our continued financial discipline and strong balance sheet. We believe clients should have the necessary information to make intelligent choices.”

Forex Capital Markets, LLC Far Exceeds

The NFA’s New Capital Requirements

The National Futures Association (NFA) has officially announced that a new increased $ 5 million capital requirement for all Forex Dealer Members will go into effect on December 21, 2007. Although this new $5 million capital requirement has yet to take affect, NFA’s president and Chief Executive Officer has already testified before congress that capital levers for Forex Dealer Members should be raised to $20 million.

Forex Capital Markets, LLC, an NFA member firm, is the US regulated entity of the FXCM Group. As of August 31, 2007 Forex Capital Markets, LLC had an adjusted net capital of $60,268,390.

According to Niv, “The financial resources for FXCM (Forex Capital Markets, LLC) far exceed both the recently announced increased $5 million capital requirement level as well as the $20 million capital level proposed by NFA’s president and CEO in his recent congressional testimony.”

Jaclyn sends me an update on FXCM’s New Fractional Price Pip,

FXCM (www.fxcm.com) announced today they will now offer Fractional Pip Pricing. Clients can now see an additional digit in the price quotes.

Instead of quoting full pips, FXCM will now quote prices in tenths of pips. The digit representing a tenth of a pip appears to the right of the two large bold face digits:

“The Benefit is clear,” Drew Niv CEO of the forex broker stated, “Fractional pip pricing should reduce bid/ask spreads on all the more popular currency pairs.”

FXCM’s policy is to provide clients with access to the very best spreads. FXCM introduced No Dealing Desk execution, and as one of the largest FDM’s*, FXCM has strong liquidity relationships with some of the world’s leading banks. We constantly press these banks to supply the most favorable prices to our clients.

As a result, the banks are now providing streaming six-digit prices to FXCM. While competition intensifies, Fractional Pip Pricing should reduce bid/ask spreads even further.

“FXCM is delighted to pass these more accurate, tighter prices to our clients” said Niv.

For full details on Fractional Pip Pricing view this video: http://forex.acrobat.com/p68453006/

Jaclyn, FXCM sent me something that I feel its important to share. This probably will kick out many small brokers that doesn’t have the minimum networth that NFA requires. Read below.

Dear Client:

The Forex industry could be in for a major structural change — soon.

This change has the potential to benefit Forex Capital Markets, LLC (“FXCM”); however, we believe many forex brokers may not survive.

Our industry’s regulating agency, the National Futures Association (“NFA”), has proposed new financial requirements for every Forex Dealer Member (“FDM”). Spelled out in their “Request for Comments on Forex Proposals,” dated June 19, 2007, the NFA’s proposed requirements call for the following:

• All FDMs must maintain at all times a net worth of $5 million;
• Larger FDMs, particularly those that have a dealing desk, could potentially face net excess capital requirements significantly higher than the minimum under the proposed new rules;
• Where appropriate, the NFA may require an FDM’s annual financial statement to be certified by an independent public accountant.

FXCM’s current financial situation well exceeds NFA’s proposed requirements.

As of June 30, 2007, FXCM has over $44 million in adjusted net capital, and for the last six years we have had our financial statements audited by an independent, certified public accounting firm.

We believe the NFA is proposing these requirements because of the troubling number of insolvencies and near-insolvencies that have recently plagued the forex industry. According to the NFA:

• In 2003, a Forex Dealer Member misappropriated almost $2 million in customer funds, driving the company into bankruptcy. (The CFTC is currently attempting to salvage some of the customers’ funds.)
• Since March of this year, eight different FDMs have fallen under the “early warning” requirement of $1.5 million.
• More recently, NFA took a Member Responsibility Action (“MRA”) against an FDM whose liabilities exceeded its assets by over $1 million.

Industry-wide, there is now concern that some Forex Dealer Members may be unable to meet their financial obligations to customers in the event the increased capital requirements take effect. A review of the current net capital positions of the 43 Forex Dealer Members available on the following CFTC web page clearly demonstrates that this concern is justified. View CFTC Web Page

As you can see from the financial data compiled by the CFTC, FXCM reports an adjusted net capital of over $44 million—far greater than the proposed financial requirement. Based on the most current available CFTC financial data, at least 22 FDMs would not be able to meet the new $5 million minimum net capital requirement. These firms are currently reporting net capital levels below $5 million. If the new capital level is imposed, these firms will either have to obtain more capital or close down. Because larger brokers may also face higher capital requirements, FXCM believes that several of these larger firms may also be unable to meet the new requirements, even though they presently have in excess of $5 million in adjusted net capital.

In the event that some of these firms close down—or worse, are shut down by the NFA—we are concerned that customer funds, or at least their timely and orderly repayment, could be jeopardized.

We realize that many forex traders have accounts with multiple forex brokers. That is why we advise you to make sure all your trading accounts are held at firms that are adequately capitalized.

If you have an account with a possibly endangered firm, we believe, depending on when the NFA proposal takes effect, that the time may be fast approaching to consider moving those funds while the opportunity still exists.

Our industry is changing, and the new proposed regulations are intended to put every FDM, and the industry itself, on a more secure financial footing. We welcome the NFA’s proposed changes because the effect will ultimately lead to clients trading through regulated brokers that are better capitalized or have access to greater financial resources.

Please contact us if you have any questions regarding these changes.

We look forward to serving you.

Got this from my mails and I thought I’d share this.

FXCM (www.fxcm.com) announced today that it has added a new feature to FX Trading Station II. Clients are now able to place a market order with one click. This new feature, one-click execution, will let clients trade more easily on news events and in volatile markets.

The default setting for entering a trade, a two-step process, will not change. However, this is not quite fast enough for many forex traders and that is why one-click execution is now available for FXCM live and demo account clients.

Drew Niv, CEO of FXCM explained “Many of our traders asked us to streamline our process to allow them to place orders in less time. Clients who trade during volatile market conditions when the price can move in hundredths of a second need the ability to move quickly in and out of the market.”

For Live and Demo account clients, FXCM has created an instructional Video to learn more about one-click execution and how to choose this as a trading mode. https://admin.acrobat.com/_a205571165/p17029901/

Honestly, I don’t think 1-Click is pretty much useful to my own benefit. Anyone else uses 1-Click type of execution?