The new regulations imposed by the Commodity Futures Trading Commission (CFTC) in the United States have not only limited leverage to 1:50 (majors) and 1:20 (other pairs) but they have also made US brokers with non-US offices repatriate US customers so that they trade under US regulations. During the past few weeks people with accounts at FXDD (malta), Forex.com UK and FXCM UK – amongst others – have been told by their brokers that before October 18th their accounts will be moved back to their US branch so that the accounts can trade under current US laws. Many people are not very happy about this due to the hedging, leverage and FIFO (First-In-First-Out) restrictions of the NFA which pose severe limitations in the way in which people can trade, especially when using the Metatrader 4 platform which has some important limitations regarding how positions can be treated. Does this mean that all US citizens have to trade under US law ? Is there any option available for US customers ?
As far as I have understood, the legislation currently in place is not absolutely clear about this. It is clear that brokers which have both US and over seas offices can only take US customers under their US branch but it is not very clear if non-NFA brokers can in fact take any US customers at all. Up until now there have been no efforts to make non-US brokers cease to accept US customers but this may happen in the future. In the meantime it seems that a US citizen can open and trade with a non-NFA broker provided that this broker has absolutely no ties with the US (no NFA regulation or US offices) and that the broker has been previously accepting US citizens. I have spent a while searching for non-NFA brokers that accept US citizens and I have compiled a small list for those of you interested in doing so. Bear in mind that you should email or talk to the support of any of these brokers if you wish to join them to ensure both that they will not change their current stand on US customers and that their trading conditions and deposit/withdrawal facilities are in line with your needs.
These are the non-NFA Metatrader 4 brokers I have found that still accept US customers (to this date)
- ActivTrades – UK
- LiteFX – Seychelles
- FXOpen – Egypt
- Forex-metal – Russia
- VantageFX – Australia
- InstaForex – Russia
- Tadawul FX – Swiss
- MIG Bank – Swiss
- DukasCopy – Swiss
As you see there are quite a few brokers which will still accept US customers with many of them being very well regulated in Switzerland and the UK – like Dukascopy and ActivTrades – while others are very reputable brokers with many years of existence like FXOpen and LiteFX. From the above brokers you can have many different options from very small cent accounts – FXOpen – to segregated institutional accounts on the UK and Swiss brokers. The large majority of these brokers will allow you to trade with leverage levels of up to 1:400-500 with hedging and no FIFO rules, added to this you can also choose between a myriad of payment methods going from online currencies like AlertPay and Liberty Reserve to credit card and wire transfers.
If you have just been “kicked out” of your overseas broker and now you are being forced back into US territory you definitely have a choice to go out and get yourself a broker you can trade comfortably with. Right now the above list gives you many options ranging from very highly regulated brokers to less regulates ones with many deposit/withdrawal methods and account/lot sizing options. However please remember to contact the broker you want to join yourself so that you can get an idea of their policy towards US citizens and any changes they might make in the future in this regard. The most important thing here is that you find a broker which suites your needs, is not exposed to the CFTC and will not change their policy regarding US citizens in the future.
If you want to trade within a US broker and your strategy has no problems with the amount of leverage currently being offered then it might just be a matter of time since the Metatrader 5 platform – which was built around a net positioning approach – can trade any hedging or portfolio strategy without having to worry about FIFO or hedging rules. In the near future – probably 1 to 2 years – Metatrader 5 will start to be offered for live trading, marking a solution to most of the current problems of the Metatrader 4 platform which make it so unfriendly to use under current CFTC regulations.
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