CompassFX
NFA Compliance Rule 2-43
As you may have already heard, the National Futures Association (NFA) has adopted a new Compliance Rule 2-43 regarding Forex trading.
http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=2273
This rule states that Forex Dealer Members (FDMs) may not carry offsetting positions in a customer account, but must offset them on a First-In, First-Out (FIFO) basis. FIFO means that when multiple positions are held in the same currency pair, the position which was first opened will be the first to be closed.
Also, stop-loss orders and limit orders on some trading platforms may not comply with the FIFO ruling because stop-loss and limit orders on those platforms do not necessarily close the oldest position on a currency pair first. As a result, stop-loss and limit orders on those platforms may no longer be in compliance with US regulations.
Why is the NFA implementing this new ruling?
The NFA's position is that FIFO provides more transparency to customers, offering a more accurate picture of an account’s Profit/Loss on multiple positions than viewing the results of individual positions. This ruling brings the Forex market more in line with the practices of the futures and equities markets.
How are CompassFX clients affected?
The recent “No Hedge” ruling and now the “FIFO” ruling brought about by NFA Compliance Rule 2-43(b) will mean that traders may no longer be able to trade using the current version of MetaTrader 4.0 through a U.S. regulated FDM. Nor will traders be able to modify or close trades from any “Open Positions" window. This major new rule will go into effect after July 31, 2009.
What are the options that CompassFX is providing clients?
We know that this ruling will affect most every trader, especially those using the MetaTrader 4.0 platform. Therefore, CompassFX has established relationships with FX Solutions Australia and Gain Capital U.K. Our website is updated with the latest account documentation links to these firms:
http://www.compassfx.com/compassfx/open_account.htm
FX Solutions Australia and Gain Capital U.K.offer MetaTrader 4.0 with hedging and full stop-loss and limit order capability. Both firms are registered and regulated by their respective authorities.
FX Solutions Australia is a registered business name of IFX Markets Ltd. and is authorized and regulated by the Australian Securities and Investments Commission (ASIC). IFX Markets Ltd holds Australian Business Number 77 114 282 174.
GAIN Capital - FOREX.com UK Ltd. ("FOREX.com UK Ltd") is authorized and regulated by the Financial Services Authority (FSA).
Both firms are prepared to work with us to provide our clients a smooth account transition.
If you trade on the FXDD MetaTrader platform, we have not heard the position of FXDD moving forward. Our hope is that they have a plan expected to be released soon. We will inform our clients as soon as we know their plans.
Questions & Answers
If I switch my account to FX Solutions Australia or Gain Capital U.K., what account protection is available?
The FSA is the regulatory body that oversees spot Forex trading in the United Kingdom and requires Forex accounts to be fully segregated in accordance with FSA client money rules. To learn more about Gain Capital U.K. and the FSA, click on these links:
http://www.fsa.gov.uk/Pages/About/What/index.shtml
The ASIC is the regulatory body that oversees spot Forex trading in Australia. To learn more about FX Solutions Australia and the ASIC, click on these links:
http://www.asic.gov.au/asic/asic.nsf/byheadline/Our+role?openDocument
How do I open a new account at FX Solutions Australia or Gain Capital U.K.?
CompassFX has updated the account documentation on our website at:
http://www.compassfx.com/compassfx/open_account.htm
How do I fund my new account at FX Solutions Australia or Gain Capital U.K.?
Gain Capital U.K. provides convenient ways to fund a trading account by bank wire, debit card, and credit card transactions. Click on this link for more information:
http://www.forex.com/uk/forex_account_funding.html
FX Solutions also offers clients easy and convenient methods to fund their accounts bank wire, debit card, and credit card transactions. Fund a new account with as little as $250. Click on this link for more information:
http://www.fxsol.com.au/accounts/deposit-funds.asp
Can I get a demo account at FX Solutions Australia or Gain Capital U.K.?
Yes. CompassFX has demo account registrations ready. Click on this link to review the MetaTrader platforms offered by FX Solutions Australia and Gain Capital U.K.: http://www.compassfx.com/compassfx/open_account.htm
It is our goal at CompassFX to provide Forex traders the proper tools and resources to trade well. We have and will continue to create strong alliances with regulated Forex brokers and make the necessary additions and adjustments for the well being of our clients. We will continue to act on your behalf as a liaison between you and the clearingfirm. And, you can depend on us to provide continued customer support, education, and resources to help you become a better trader.
If you have any questions or concerns, please email us at support@compassfx.com.
RISK WARNING: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your monetary objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your deposited funds and therefore you should not speculate with capital that you can not afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent advisor if you have any doubts. Past returns are not indicative of future results.
CompassFX and its affiliates assume no responsibility for errors, inaccuracies or omissions in these materials. They do not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. CompassFX and its affiliates shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. This is not a solicitation to buy or sell currency or futures. CompassFX is compensated for its services through commissions and/or the spread between the bid/ask prices. All replies should be sent to support@compassfx.com. Replies sent to support@compassfx.com will be received by the CompassFX corporate email system and are subject to storage and review by someone other than the recipient.
* The Forex market is an "off-exchange" market which may affect your trading outcome.