GFT's 'exit' from retail forex US market – the real story
Reading the story below you may think it’s either a work of fiction or that it happened in a Third
Reading the story below you may think it’s either a work of fiction or that it happened in a Third World country. Unfortunately it’s neither.
Although the NFA never published anything we managed to glue various bits and pieces and work out what really happened:
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For a while now GFT, and several other brokers, calculated their regulatory capital requirements for various global subsidiaries from one pooled corporate capital account. This account was put aside as part of the company’s own capital and was separated from their customer funds account. The practice was known and accepted by the NFA for several years and was (and perhaps still is) practiced by several US forex brokers. It also didn’t violate any rule separately or jointly in any jurisdiction since all the required capital was there, simply pooled in one account and calculated as per each jurisdiction’s requirement.
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During the last week of November the NFA decided that this is no longer acceptable and must immediately change. What does immediate mean you ask?
On around November 29th or 30th the NFA stormed GFT’s offices demanding that the company immediately make the change – that is move the $20+ million + haircuts into a separate US based bank account. The NFA gave GFT less than 48 hours to do so or put clients on liquidation mode. This gave GFT just Friday the 30th to make the required change without any proper preparations and planning. It didn’t come as a huge surprise that GFT wasn’t able to make this on time. This also didn’t leave any time to give GFT’s clients any sufficient notice or prepare a succession plan whereby they’ll be able to prepare for the move to another broker. The result was a delayed market opening on Sunday and the subsequent announcement on GFT’s website that the company is exiting the US market without specifying the reason or why is this happening so suddenly.
Up until now GFT’s clients didn’t know the real story and many of them wrote to us directly and in comments fuming at GFT – however their rage should be directed at someone else.
Gary Tilkin, GFT’s CEO, woke up one day thinking it’s just another day in the office, later that day he was bullied, literally at regulatory gun point, into shutting down his US business, and this without him breaking any rule. This process more than anything harmed the very same customers the NFA is supposed to protect.
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American, not even once
American, not even once
This is sickening.
GFT was, and still is, an exceptional company that always had the highest level of integrity of any firm I have ever known or been a part of. For a firm like this, that has done just about everything right for well over a decade to be put in such a situation as this is despicable.
Any firm who still does business in the US can hear the ice cracking under their feet.
do you really think americans should enforce their rules on foreign firms? where does this end? they’ll make british drive on the right side of the road?
good point Adil…
good point Adil…
do you really think americans should enforce their rules on foreign firms? where does this end? they’ll make british drive on the right side of the road?
This is sickening.
GFT was, and still is, an exceptional company that always had the highest level of integrity of any firm I have ever known or been a part of. For a firm like this, that has done just about everything right for well over a decade to be put in such a situation as this is despicable.
Any firm who still does business in the US can hear the ice cracking under their feet.
they should sue NFA for negligence and incompetence
they should sue NFA for negligence and incompetence
is the client account safe at gft in the interm?
is the client account safe at gft in the interm?
just paste some of the content here 🙂
just paste some of the content here 🙂
of course, all of them were either already withdrawn by clients or moved to Gain
really? you call me by last name? do we know?
yes they all published rules but they only chase those that break these rules on their soil, not outside of it – which only CFTC does. i never say RBI sue a foreign firm for accepting Indian clients although all of them (yes including those regulated in the US) do – explain this please?
really? you call me by last name? do we know?
yes they all published rules but they only chase those that break these rules on their soil, not outside of it – which only CFTC does. i never say RBI sue a foreign firm for accepting Indian clients although all of them (yes including those regulated in the US) do – explain this please?
of course, all of them were either already withdrawn by clients or moved to Gain
What have this country com to. I still cant beleive this is happening, NFA should be put down like the dog it is. This is unheard of, its time to pack your bags and look for real FREEDOM.
What have this country com to. I still cant beleive this is happening, NFA should be put down like the dog it is. This is unheard of, its time to pack your bags and look for real FREEDOM.
Thanks Michael!
Thanks Michael!
I’m curious as to who’s next. I’ll just have to sit and watch, I suppose.
I’m curious as to who’s next. I’ll just have to sit and watch, I suppose.
basically you are saying it’s not fair but enforceable 😉 i agree
it’s too harsh of an action IMO, Gain will only be fined for something far more problematic
it’s too harsh of an action IMO, Gain will only be fined for something far more problematic
basically you are saying it’s not fair but enforceable 😉 i agree
I have to say that I don’t really get it. I am sure that ever since the NFA debacle of PFG they are paying closer attention to the required capital and it make sense that if a company operates multiple subsidiaries that each subsidiary will have sufficient capital in its regulatory jurisdiction – I know that this is how we run our business. If GFT had the money but if was in a different account I cannot imagine the NFA not being satisfied with GFT issuing a wire order for the money and providing the NFA the required proof that… Read more »
I have to say that I don’t really get it. I am sure that ever since the NFA debacle of PFG they are paying closer attention to the required capital and it make sense that if a company operates multiple subsidiaries that each subsidiary will have sufficient capital in its regulatory jurisdiction – I know that this is how we run our business. If GFT had the money but if was in a different account I cannot imagine the NFA not being satisfied with GFT issuing a wire order for the money and providing the NFA the required proof that… Read more »
We need to file a class action lawsuit against the NFA and CFTC for single handedly destroying an entire industry.
We need to file a class action lawsuit against the NFA and CFTC for single handedly destroying an entire industry.
The USSA has finally gone into gangster shakedown mode.
The USSA has finally gone into gangster shakedown mode.
you are saying we should wait for MT6 then? 🙂
you are saying we should wait for MT6 then? 🙂
It was done on fridy, when nothng can be done quickly. Big guys killing usa retail forex market…..
It was done on fridy, when nothng can be done quickly. Big guys killing usa retail forex market…..
Sickening, what is sickening the mess and fiasco at GFT ?
Sickening, what is sickening the mess and fiasco at GFT ?
who said that ‘more and more firms are moving away from MM model towards STP/ECN”? that’s incorrect
no… spread betting is forbidden in the US, only NADEX has some kind of license, this is proper options trading.
no… spread betting is forbidden in the US, only NADEX has some kind of license, this is proper options trading.
who said that ‘more and more firms are moving away from MM model towards STP/ECN”? that’s incorrect
As far as I’m concerned the NFA did their job and in my opinion shut down one of the worst crooks in the game. WTG NFA!! Yeeaaahhhh Boooiiii!!!! Another one bites the dust!!
As far as I’m concerned the NFA did their job and in my opinion shut down one of the worst crooks in the game. WTG NFA!! Yeeaaahhhh Boooiiii!!!! Another one bites the dust!!
For some reason I don’t think the NFA acts like a gangster squad and bursts into people’s offices like that with no reason … I am sure there is MORE to this story than anyone is willing to admit to at this moment.
Why would GFT be singled out like that? What makes them so special?
For some reason I don’t think the NFA acts like a gangster squad and bursts into people’s offices like that with no reason … I am sure there is MORE to this story than anyone is willing to admit to at this moment.
Why would GFT be singled out like that? What makes them so special?
and even there due to very low profit margins most prime brokers make markets
true that, but it took equity options long long time to become as popular as it is now… though everything now is happening much faster it would still takes fx options quite a few years to reach that level of volatility/maturity/volume/etc
true that, but it took equity options long long time to become as popular as it is now… though everything now is happening much faster it would still takes fx options quite a few years to reach that level of volatility/maturity/volume/etc
and even there due to very low profit margins most prime brokers make markets
well FXDD was hit few days later
well FXDD was hit few days later
absolutely
absolutely
keep being happy at their gangster methods and you’ll soon have no one to trade with, good or bad (assuming you are US based)
keep being happy at their gangster methods and you’ll soon have no one to trade with, good or bad (assuming you are US based)
just didn’t see added value in it except external linking
what’s bforex got to do with ibfx?
what’s bforex got to do with ibfx?
just didn’t see added value in it except external linking
that’s the whole story unfortunately, and yes NFA are bunch of incompetent imbeciles shutting down companies left and right just because they can
that’s the whole story unfortunately, and yes NFA are bunch of incompetent imbeciles shutting down companies left and right just because they can
What’s the story with Japan then? Did the Japanese FSA give them 48 hours too?
I have to say that though I don’t agree with some of the things that the NFA does they are very reasonable and approachable so this story seems like what GFT wanted to sell the public which may have some truth in it but certainly not the whole story.
— Asaf.
What’s the story with Japan then? Did the Japanese FSA give them 48 hours too?
I have to say that though I don’t agree with some of the things that the NFA does they are very reasonable and approachable so this story seems like what GFT wanted to sell the public which may have some truth in it but certainly not the whole story.
— Asaf.
story didn’t come from GFT
just like with fxcm’s case (JFSA gave them warning if you remember) Japanese accounts were managed from US ergo no longer manageable
story didn’t come from GFT
just like with fxcm’s case (JFSA gave them warning if you remember) Japanese accounts were managed from US ergo no longer manageable
i think reading between the lines his statement is quite obvious… and anyone standing up to cftc/nfa monopoly gets my vote 🙂
i think reading between the lines his statement is quite obvious… and anyone standing up to cftc/nfa monopoly gets my vote 🙂
Michael – I’m in 100% agreement with Asaf and MC as quoted above. There has to be more to this story than is being reported – and I’m wondering why you’re so one sided in your analysis. Has GFT had trouble with NFA in the past?
Michael – I’m in 100% agreement with Asaf and MC as quoted above. There has to be more to this story than is being reported – and I’m wondering why you’re so one sided in your analysis. Has GFT had trouble with NFA in the past?
trust metaquotes to turn doubts into facts 😉
trust metaquotes to turn doubts into facts 😉
what more can there be? NFA being inept isn’t enough? why am i one sided – try monitoring what NFA did to the US forex market in the past few years and let’s see whether you’ll take their side on anything
what more can there be? NFA being inept isn’t enough? why am i one sided – try monitoring what NFA did to the US forex market in the past few years and let’s see whether you’ll take their side on anything
Michael, Some of the comments on this post demonstrate what keep fueling NFA arrogance and malpractise. The problem is on one side we have pysco-traders who think a broker is dirty regardless, always blaming the broker for losses often caused by their ignorance and lack of discipline. They applaude actions and don’t realize the regulator has an agenda to destroy the forex in the US and is almost done. On the other side the blame is to the broker themselves, rather than putting together a serious class action agains the NFA, they stand like jackals hoping the competitor get shut… Read more »
yep, they all threat but don’t pursue unless broker is located in their countries. only cftc pursues its laws on completely foreign entities…
yep, they all threat but don’t pursue unless broker is located in their countries. only cftc pursues its laws on completely foreign entities…
Michael, Some of the comments on this post demonstrate what keep fueling NFA arrogance and malpractise. The problem is on one side we have pysco-traders who think a broker is dirty regardless, always blaming the broker for losses often caused by their ignorance and lack of discipline. They applaude actions and don’t realize the regulator has an agenda to destroy the forex in the US and is almost done. On the other side the blame is to the broker themselves, rather than putting together a serious class action agains the NFA, they stand like jackals hoping the competitor get shut… Read more »
unbelievable, i wasn’t aware of this, but somehow i’m not surprised
thanks for the support, it was a good explanation
unbelievable, i wasn’t aware of this, but somehow i’m not surprised
thanks for the support, it was a good explanation