FXCM comments on the CFTC requirements

Last week, the U.S. Commodity Futures Trading Commission (CFTC) released its final rules regarding off-exchange retail Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term trading, which will take effect on October 18, 2010. FXCM would like to address some questions concerning the new leverage rules.

5% margin (20:1 leverage)

Exotic Currency Pairs, 10K Standard LLC Accounts, Exotic (Variable) Margin:

By October 18, 2010, the maximum leverage available with FXCM LLC for trading will be 50:1 for major currency pairs and 20:1 for exotic currency pairs.

2% Margin (50:1 leverage) Major Currency Pairs

10K Standard LLC Accounts

“We believe that the reduction in leverage is a reasonable compromise from the initial CFTC proposal of 10:1 leverage. FXCM does believe lower leverage will be to the benefit of traders as higher leverage can often times result in a few losing trades offsetting many winning trades,” commented Drew Niv, CEO of FXCM. “FXCM has already implemented 50:1 as the default margin setting on FXCM LLC standard Forex Trading Forex Trading Forex trading is the buying and selling of foreign currencies with the aim of generating a profit. The value of currencies, especially floating currencies, fluctuate to varying degrees. This constant volatility of exchange rates opens the door for speculators to invest in a certain currency against another. The Forex market is the world’s biggest and most liquid market, with over $5 billion turnover every single day, with the market being open 24 hours a day, 5 days a week.It goes without saying Forex trading is the buying and selling of foreign currencies with the aim of generating a profit. The value of currencies, especially floating currencies, fluctuate to varying degrees. This constant volatility of exchange rates opens the door for speculators to invest in a certain currency against another. The Forex market is the world’s biggest and most liquid market, with over $5 billion turnover every single day, with the market being open 24 hours a day, 5 days a week.It goes without saying Read this Term accounts and, as a result, the new leverage requirements will have a minimal impact on our Standard 10k LLC accounts.”

Additionally, as of October 18, 2010, all referring brokers introducing business to registered FCMs or Retail Foreign Exchange Dealers will be required to formally register with the CFTC as Introducing Brokers and become NFA members.

In anticipation of this rule, FXCM has already initiated procedures to be in compliance as of October 18. In fact, FXCM began encouraging all referring brokers to seek registration as Introducing Brokers months before the CFTC published its final rules.