Last week, the U.S. Commodity Futures Trading Commission (CFTC) released its final rules regarding off-exchange retail Forex 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:
| USD/MXN ($500) | SGD/JPY ($500) | EUR/PLN ($875) | USD/TRY ($500) | USD/PLN ($500) |
| EUR/TRY ($875) | EUR/CZK ($875) | USD/RUB ($500) | USD/CZK ($500) | EUR/HUF ($875) |
| UZD/ZAR ($500) | USD/HUF ($500) | USD/SGD ($500) | TRY/JPY ($500) | USD/HKD ($500) |
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
| $200 Margin | $200 Margin | $240 Margin | $300 Margin | $340 Margin |
|---|---|---|---|---|
| USD/JPY | USD/DKK | CHF/JPY | EUR/USD | GBP/USD |
| USD/CHF | USD/NOK | CAD/JPY | EUR/CHF | GBP/JPY |
| AUD/USD | AUD/CHF | CAD/CHF | EUR/GBP | GBP/CHF |
| USD/CAD | NOK/JPY | CHF/SEK | EUR/JPY | GBP/CAD |
| NZD/USD | SEK/JPY | CHF/NOK | EUR/AUD | GBP/NZD |
| AUD/CAD | HKD/JPY | EUR/CAD | GBP/AUD | |
| AUD/JPY | ZAR/JPY | EUR/SEK | GBP/SEK | |
| NZD/JPY | NZD/CHF | EUR/NOK | ||
| AUD/NZD | NZD/CAD | EUR/NZD | ||
| USD/SEK | EUR/DKK |
“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 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.
