de | cn | ru

Market News

CFTC Slaps $275,000 Penalty on CMS Forex over Capitalization Flaws

The United States Commodity Futures Trading Commission (CFTC) on Monday imposed a $275,000 penalty on Forex broker Capital Market Services, LLC (CMS) over failures to meet requirements for the capitalization of Futures Commission Merchants (FCM), Retail Foreign Exchange Dealers (RFED) and FDMs.  

 
The watchdog has found that the broker had trouble meeting the capital requirements for at least 17 months in the period from March 2009 until October 2012. At some point, the deficiency was massive at $13 million. Well, now you must be asking yourselves what kind of a requirement we are talking about. The minimum capital requirement for an FCM is at $1 million, but for FCMs that are also registered as RFEDs (these are the retail brokers, putting it bluntly) the sum rises to more than $20 million. For CMS Forex the sum was $21 million. 
 
The order from the CFTC is not only imposing the penalty but is also settling the charges against CMS, with the regulator admitting the firm's cooperation and the measures undertaken to tackle the deficiencies. 
 
This case highlights how rough the regulatory climate has become for US Forex brokers – the number of Futures Commission Merchants in the country has fallen recently, with many brokers choosing to quit the US Forex market. One example is Alpari US, which in September 2013, announced the closure of its US retail FX operations. And just a couple of days ago it became clear that Institutional Liquidity LLC is also leaving the list of FCMs and is transferring its business to Advantage Futures.
 
The capital requirements for US Forex brokers are amid the most stringent in the world. They only lag behind those in Switzerland, where a Forex broker should have a capital of at least CHF 20 million ($22.5 million). On the other hand, we have countries like Cyprus where the minimum capital requirement stands way lower at $1 million.
TAGS: cms  cms forex broker  capital market services  us forex broker  cftc  nfa  capitalization  capital requirements  forex regulation  forex rules  net capital  retail forex broker  futures commission merchant 

More news about CMS

Broker Country Regulation Platform Min Deposit Review
US CFTC, NFA MT4, Web,
in-house
$50 Review Website
US NFA, CFTC MT4 $250 Review Website
Cyprus, UK, Mauritius CySec, FCA, IFSC MT4, MT5, Web $10 Review Website
Cyprus, Australia CySec, ASIC MT4, Web,
Mobile app
$100 Review Website
Australia, Cyprus ASIC MT4, MT5,
IRESSTrader
$100 Review Website
UK, Cyprus, Australia FCA, CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia FCA, ASIC MT4, Trading
Station,
NinjaTrader
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
Markets,
cTrader
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
Australia ASIC MT4, MT5 $100 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website
Australia, UK ASIC, FCA MT4, MT5,
cTrader
$200 Review Website

More Forex Market News

UK’s FCA warns of AGM Group and Sigma4Trade clone firms

Jun 13 2019 14:18:24

  The UK’s Financial Conduct Authority (FCA) has recently updated its warning list with AGM Group and Sigma4Trade – two forex brokers that falsely claim to operate under legit companies, licensed by the regulator. Read more

Ireland to ban binary options and restrict CFD trades permanently

Jun 12 2019 15:40:33

  The Central Bank of Ireland (CBI), which also serves as a financial services regulator, announced its plans to make ESMA’s product intervention measures permanent. Read more

Spanish regulator adds Olympus Markets and several other offshore brokers to its warning list

Jun 10 2019 13:21:05

  The Comision Nacional del Mercado de Valores (CNMV) has updated its warning list with the already Olympus Markets, as well as several other offshore brokers - TopTradepro, UBCFX and Profit Trade. Read more

The FCA flags GlobalArabFX and iForex24 as clone firms

Jun 06 2019 12:48:37

  UK's Financial Conduct Authority (FCA) has recently warned against two clones: GlobalArabFX and iForex24. Read more

ASIC updates warning list with MRT Markets, RIMarkets, and Golden Day Profit

Jun 03 2019 13:03:04

  The Australian Securities and Investment Commission (ASIC) has added forex brokers MRT Markets, RIMarkets, and Golden Day Profit its list of unlicensed companies illegally targeting local investors. Read more

UK’s FCA adds Key Markets and CFD Premium to its warning list

May 31 2019 07:50:24

  The Financial Conduct Authority (FCA) has recently updated its warning list with unregulated brokers Key Markets and CFD Premium on Thursday. According to the regulator, these brokers have been providing financial services or products in the UK without its authorization. Read more

CySEC proposes a tiered approach to leverage

May 30 2019 14:10:07

  The Cyprus Securities and Exchange Commission (CySEC) proposed a tiered risk-based approach to leverage as a permanent national measure for investor protection. Read more

Two US Presidential Candidates already accept crypto donations

May 27 2019 13:27:17

  As the 2020 US presidential elections are approaching, candidates are already striving for media attention. Read more

ASIC warns against unregulated broker GFC Investment

May 23 2019 11:44:53

  The Australian Securities and Investment Commission (ASIC) has blacklisted unregulated forex broker GFC Investment. The regulator advised investors not to deal with this broker, as it is not authorized to provide financial services in Australia and could be involved in a scam. Read more

UK residents lost over £27 million to forex and crypto scams last year

May 21 2019 11:46:54

  UK’s Financial Conduct Authority (FCA) reported that local investors lost over £27 million to scams involving crypto and forex investments last financial year. Read more

de | cn | ru