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US Forex Brokers

 

US Forex brokers must be licensed as futures commission merchants (FCM) and must have retail foreign exchange dealer (RFED) license. FCM and RFED are licensed by the Commodity Futures Trading Commission (CFTC) and become members of -the National Futures Association (NFA), a self-regulatory organization whose jurisdiction extends for the whole futures market.

 

NFA-regulated forex brokers face a number of restrictions and must meet various requirements, the most important of which are the following:

 

- the capital requirement: NFA-registered brokers are obliged to maintain a net capital of at least $20 million to guarantee clients positions.

- the FIFO (first in, first out) rule: Traders must close their oldest transactions first whenever they have more than one position open on the same currency pair;

- leverage restriction: All US brokers are required to provide leverage no higher than 1:50, while brokers outside of US regulations purview are free to provide up to 1:1000 or even 1:2000 leverage. 

- hedging is not allowed.

 

Furthermore, the NFA adopted new rules on disclosure of transaction data In 2007, according to which US regulated brokerages are required to provide their customers with access to certain transaction execution data for greater transparency.

 

 

As you can see from above, the US forex brokerage arena one of the most tightly regulated in the entire world. NFA’s fines are solid so basically no one wants to go off the marked path and US brokers enjoy a higher level of trust. On the other hand, however, after the Dodd–Frank Act was passed (capping leverage to 1:50 and prohibiting hedging), the number of FCMs keeps shrinking and there is an ever-growing demand for brokers (outside the US) who accept US clients.

US Forex Brokers

Broker Country Platforms Min.deposit Regulation Review
US MT4, Web,
in-house
$50 CFTC, NFA Review Website
US, UK, Canada, Australia, Japan, Singapore MT4, Web,
fxTrade
$1 CFTC/NFA, FCA, ASIC Review
USA Web,
thinkorswim
$2000 FINRA/SEC Review
US, UK, Australia, Canada Web, Trader
Workstation,
FXTrader, PTMC
$10 000 NFA, CFTC, FCA, ASIC Review
US, EU Varies NFA, FCA Review
US MT4, PathFinder
Trader
$2,000 NFA, CFTC Review

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