June 30th was decision time for Futures Commission Merchants (FCM) acting as counterparties to forex transactions. Under a new rule proposed last November, as of June 30th, registered FCMs with the NFA that also acted as counterparties to forex transactions were required to maintain minimum capital requirements of $20,000,000, similar to Forex Dealer Members (FDM). Several brokers that had downgraded their FDM license continued to operate in the US as FCMs with a lower requirement of $1,000,000. However, the new rules have caused these firms to decide whether to completely exit the US due to the increased capital requirements that went into effect for July.
Leaving the US earlier this year due to the requirements were Easy Forex and Forex Club, leaving only Advanced Markets, as the remaining firm that would be affected by the new rules. Deciding it’s not worth the $20,000,000 minimums; Advanced Markets has also officially withdrawn all of its licenses with the NFA. As of June 28th, the broker withdrew both its FCM license and NFA membership.
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Updating Forex Magnates, CEO of Advanced Markets, Anthony Brocco told us that they have swapped out their US regulation with that of Australia; thereby becoming ASIC regulated on June 28th as well. He explained that ASIC offers regulation to foreign brokers, and as their business is wholesale liquidity based, and not retail, it was a better match for them and their clients.