This is an odd announcement to say the least, after all foreign forex brokers had to stop accepting US traders since October 2010… Apparently Tadawul FX has been accepting US clients until now and will only stop doing that after July 8th. Not sure exactly why they kept accepting US clients especially given their European regulation and given that CFTC is aggressively pursuing any offshore broker accepting US traders.
Dear Valued Client,
You might be aware of the recent changes in U.S. regulations regarding off-exchange retail foreign exchange. The new regulatory rules-implemented by the Commodity Futures Trading Commission (CFTC), the U.S. government agency responsible for the regulation of retail foreign exchange-apply to retail forex transactions that are offered or entered into by entities registered with CFTC under the Commodity Exchange Act (CEA).
Tadawul FX Ltd. is regulated by Cyprus Securities and Exchange Commission (CySec) and complies with all applicable European Union laws and regulations, including those under the European Markets In Financial Instruments Directive (MiFID). Although, Tadawul FX does not have any offices or operations in the US and is not subject directly to the licensing laws of U.S. regulators, further to our compliance checks it appears that the CFTC does not allow retail forex transactions to be provided to U.S. clients by entities not registered with the CFTC.
Due to the regulatory restrictions in the U.S., it is with great regret we inform you that Tadawul FX will no longer be able to accept any transactions from U.S. residents from 8th July 2011.
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Procedure for USA resident clients
By 8th of July 2011 (22:00 CET) all open positions and all pending orders must be closed. Any positions left open will be automatically closed at the last available price, and all pending orders will be cancelled.
All funds in the trading account must be withdrawn to the original source. To collect all remaining balances from your trading accounts, you are kindly requested to send a withdrawal form, which will be processed once it is received. If you have recently sent funds to your trading account, the funds will be sent back to your original source, as soon as these are received. As of Wednesday 6th July 2011, no deposits will be processed from U.S. residents.
The status of the trading account will be changed to “Read Only,” allowing you to access your account with your existing login details, just to view history and generate reports as you require.
We sincerely apologize for any inconvenience this may cause you, but unfortunately changes in U.S. regulations are beyond our control. Nonetheless, we will continue to reevaluate the U.S. laws and would be happy to accept U.S. residents in the future, should the laws and regulations change. We have thoroughly enjoyed working with you and would like to thank you for your business. Please feel free to seek independent legal advice to further determine how the regulations affect you or your company.
If you have any questions, please do not hesitate to contact us and will be very glad to help you.