MB Trading Fined $200,000 For Failing to Maintain Minimal Capital Requirements
United States financial regulator fines MB Trading a FX broker for failing to meet minimal capital requirements. The broker had

The US Commodity Futures Trading Commission has issued a penalty of $200,000 to California based MB Trading, a FX broker, for failing to meet the regulators minimal financial requirement rules.
The fine comes on the back of the CFTC’s investigation into the broker, a Futures Commission Merchants (FCMs) that offers retail off-exchange foreign currency trading, for not meeting the $20 million adjusted net capital brokerage firms have to maintain. In its findings the broker improperly included certain funds held in four accounts in its adjusted net capital computations. The CFTC found that after excluding those funds as required, MB Trading failed to meet its adjusted net capital requirements for 456 calendar days between October 18, 2010 and March 1, 2012.
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The US OTC FX markets took a turbulent turn post new regulation in; leverage, order rules (FIFO) and capital adequacy requirements. The new rules which were implemented after the 2008 global recession had a detrimental effect on the US market in so far as broker numbers and trader numbers were on the decline.
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The new minimal capital requirements rules were effective from the 18th of October 18, 2010. The new framework was intended to protect individual investors that engage in the trading of FX. The rules state that regulated brokers classified by the CFTC as; RFEDs and/ or FCMs that offer or engage in retail forex transactions must at all times maintain adjusted net capital of $20 million, or more in some circumstances, and hold enough assets to meet or exceed their total retail forex obligations to customers. The new rules impose several restrictions on the types of funds that firms can include in their adjusted net capital and asset computations.
Minimal capital requirements for OTC brokers is common across major regulatory bodies. In the UK firms who act as principal brokers in OTC contracts must maintain a minimal capital of seven hundred and thirty thousand Euros. Presently the Untied States requirements are the steepest across all regulators however new proposals by Turkey’s financial regulatory, SPK, is set to be in-line with the US requirements.
MB Trading was part of a group of US based FX brokers that looked outside their home market to tackle the rule changes for FX markets. Several US brokers set up shop in the UK under the FSA where they were able to maintain leverage of 100 or 200 to 1 and have lower capital requirements.
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Is it still safe to keep funds there?
If someone else was to buy MBT clients, would my positions be transfered or closed?
good timing you have, the Russian government actually canned one such proposal last night, but one more is still pending.
good timing you have, the Russian government actually canned one such proposal last night, but one more is still pending.
any link for this issue? I can’t find it on NFA’s site
> and a cease and desist order
What does this mean? MB Trading is ceased?
I see. Thanks
So actually MBT has enough funds, but improperly calculate the figures from unqualified fund accounts.
“Had these funds properly qualified under the regulations, MB Trading would have complied with its adjusted net capital and asset requirements, according to the Order.
The CFTC Order imposes a $200,000 civil monetary penalty and a cease and desist order on MB Trading for these violations. The Order notes that in settling this matter, the CFTC took into account MB Trading’s cooperation and the corrective action it undertook after its deficiencies were discovered.”
as a side note,
the US futures industry/and their lobbyists are too powerful, as retail fx markets is almost strangle to death these two years. Poor boys.
according to wiki,
a cease and desist order, generally speaking is, do not do this things again and if you do I will smack your ass.
Thank you, I can’t even find a better broker than MBT, all seem to be bucket shop, charge stupid roll overs in their favor or just manipulate everything.
Will stay with them
A cease and desist is normal legal language telling them not to do it again. Looks like it was an accident based on the fact that they are saying MBT worked with them to fix and the fine was so small. The implication seems to be that the funds were held in a type of account that doesn’t qualify under the legal language requirements of the CFTC rules, but that the funds were there and safe. Otherwise, the fine would have been much higher like we have seen with others. Or, obviously, if they really didn’t have the net cap… Read more »
Anon, I wonder the same question ?