Thursday, March 31, 2016
Wednesday, March 23, 2016
What is CNH
What is CNH?
China is the world’s largest exporter and remains the second-largest economy, behind the United States.
China Flag
As part of the free trade of yuan in the global forex market, the Hong Kong Monetary Authority and People’s Bank of China created CNH as an offshore version of yuan, also known as renminbi (RMB).
Now that Beijing allows the yuan to trade more freely and the exchange rate to fluctuate at increasing intervals, traders the world over are flocking to CNH.
On any FXCM trading platform, you can buy or sell CNH, taking advantage of movements of the Chinese currency against the US dollar.
China is the world’s largest exporter and remains the second-largest economy, behind the United States.
China Flag
As part of the free trade of yuan in the global forex market, the Hong Kong Monetary Authority and People’s Bank of China created CNH as an offshore version of yuan, also known as renminbi (RMB).
Now that Beijing allows the yuan to trade more freely and the exchange rate to fluctuate at increasing intervals, traders the world over are flocking to CNH.
On any FXCM trading platform, you can buy or sell CNH, taking advantage of movements of the Chinese currency against the US dollar.
Margin Requirements
Margin Requirements
What is margin? Margin can be thought of as a good faith deposit required to maintain open positions. This is not a fee or a transaction cost, it is simply a portion of your account equity set aside and allocated as a margin deposit. Keep in mind that trading on margin can both positively and negatively affect your trading experience as both profits and losses can be dramatically amplified. You can keep track of your Used and Usable margin in the Accounts Window of the Trading Station.
SMART MARGIN WATCHER: MANAGE YOUR TRADING ACCOUNT SMARTER
FXCM is committed to increasing customer profitability. We know that our traders are right more than 50% of the time, however many traders lose more money on losing trades than they make on winning trades. FXCM believes that the Smart Margin Watcher feature, one of the newest Trading Station features, can help you stay ahead of Margin Calls and ultimately put you in a better position to trade.
The Smart Margin Watcher was designed to monitor your positions and ALERTS you if the market goes against your trades and your account equity drops below your margin requirements.
VIDEOSmart Margin Watcher
Essentially the Smart Margin Watcher can give you a buffer between your Margin Warning and liquidation, allowing you to either deposit more funds or close out of positions to potentially avoid a margin call.
MARGIN/LEVERAGE FAQS
WHAT ARE FXCM MARGIN REQUIREMENTS?
By default FXCM LLC offers a maximum of approximately 50:1 leverage (or 2% margin)* on its forex trading accounts. Margin requirements (per 1K lot) at FXCM are updated once per month. See FX MMR per 1k Lot.
WHEN ARE MARGIN REQUIREMENTS UPDATED?
Margin requirements are updated each month on the last Friday.
What is margin? Margin can be thought of as a good faith deposit required to maintain open positions. This is not a fee or a transaction cost, it is simply a portion of your account equity set aside and allocated as a margin deposit. Keep in mind that trading on margin can both positively and negatively affect your trading experience as both profits and losses can be dramatically amplified. You can keep track of your Used and Usable margin in the Accounts Window of the Trading Station.
SMART MARGIN WATCHER: MANAGE YOUR TRADING ACCOUNT SMARTER
FXCM is committed to increasing customer profitability. We know that our traders are right more than 50% of the time, however many traders lose more money on losing trades than they make on winning trades. FXCM believes that the Smart Margin Watcher feature, one of the newest Trading Station features, can help you stay ahead of Margin Calls and ultimately put you in a better position to trade.
The Smart Margin Watcher was designed to monitor your positions and ALERTS you if the market goes against your trades and your account equity drops below your margin requirements.
VIDEOSmart Margin Watcher
Essentially the Smart Margin Watcher can give you a buffer between your Margin Warning and liquidation, allowing you to either deposit more funds or close out of positions to potentially avoid a margin call.
MARGIN/LEVERAGE FAQS
WHAT ARE FXCM MARGIN REQUIREMENTS?
By default FXCM LLC offers a maximum of approximately 50:1 leverage (or 2% margin)* on its forex trading accounts. Margin requirements (per 1K lot) at FXCM are updated once per month. See FX MMR per 1k Lot.
WHEN ARE MARGIN REQUIREMENTS UPDATED?
Margin requirements are updated each month on the last Friday.
trade Forex is reason.
Why trade Forex?
Online forex trading has become very popular in the past decade because it offers traders several advantages:
FOREX NEVER SLEEPS
Trading goes on all around the world during different countries' business hours. You can, therefore, trade major currencies at any time, 24 hours per day, 5 days per week. Since there are no set exchange hours, it means that there is also something happening at almost any time of the day or night.1
GO LONG OR SHORT
Unlike many other financial markets, where it can be difficult to sell short, there are no limitations on shorting currencies. If you think a currency will go up, buy it. If you think it will fall, sell it. This means there is no such thing as a "bear market" in forex - you can make (or lose) money any time.
LOW TRADING COSTS
Most forex accounts are made up of low, competitive commissions and super-tight spreads. You trade the direct quotes from our liquidity providers with no hidden markups.2
UNMATCHED LIQUIDITY
Because forex is a $5.3 trillion-a-day market, with most trading concentrated in only a few currencies, there are always a lot of people trading. This makes it typically very easy to get into and out of trades at any time, even in large sizes.
AVAILABLE LEVERAGE
Because of the deep liquidity available in the forex market, you can trade forex with considerable leverage (up to 50:1). This can allow you to take advantage of even the smallest moves in the market. Leverage is a double-edged sword, of course, as it can significantly increase your losses as well as your gains.
INTERNATIONAL EXPOSURE
As the world becomes more and more global, investors hunt for opportunities anywhere they can. If you want to take a broad opinion and invest in another country (or sell it short!), forex is an easy way to gain exposure while avoiding vagaries such as foreign securities laws and financial statements in other languages.
Online forex trading has become very popular in the past decade because it offers traders several advantages:
FOREX NEVER SLEEPS
Trading goes on all around the world during different countries' business hours. You can, therefore, trade major currencies at any time, 24 hours per day, 5 days per week. Since there are no set exchange hours, it means that there is also something happening at almost any time of the day or night.1
GO LONG OR SHORT
Unlike many other financial markets, where it can be difficult to sell short, there are no limitations on shorting currencies. If you think a currency will go up, buy it. If you think it will fall, sell it. This means there is no such thing as a "bear market" in forex - you can make (or lose) money any time.
LOW TRADING COSTS
Most forex accounts are made up of low, competitive commissions and super-tight spreads. You trade the direct quotes from our liquidity providers with no hidden markups.2
UNMATCHED LIQUIDITY
Because forex is a $5.3 trillion-a-day market, with most trading concentrated in only a few currencies, there are always a lot of people trading. This makes it typically very easy to get into and out of trades at any time, even in large sizes.
AVAILABLE LEVERAGE
Because of the deep liquidity available in the forex market, you can trade forex with considerable leverage (up to 50:1). This can allow you to take advantage of even the smallest moves in the market. Leverage is a double-edged sword, of course, as it can significantly increase your losses as well as your gains.
INTERNATIONAL EXPOSURE
As the world becomes more and more global, investors hunt for opportunities anywhere they can. If you want to take a broad opinion and invest in another country (or sell it short!), forex is an easy way to gain exposure while avoiding vagaries such as foreign securities laws and financial statements in other languages.
Wednesday, March 9, 2016
Margin Requirement in Forex
Margin Requirements
What is margin? Margin can be thought of as a good faith deposit required to maintain open positions. This is not a fee or a transaction cost, it is simply a portion of your account equity set aside and allocated as a margin deposit. Keep in mind that trading on margin can both positively and negatively affect your trading experience as both profits and losses can be dramatically amplified. You can keep track of your Used and Usable margin in the Accounts Window of the Trading Station.
SMART MARGIN WATCHER: MANAGE YOUR TRADING ACCOUNT SMARTER
FXCM is committed to increasing customer profitability. We know that our traders are right more than 50% of the time, however many traders lose more money on losing trades than they make on winning trades. FXCM believes that the Smart Margin Watcher feature, one of the newest Trading Station features, can help you stay ahead of Margin Calls and ultimately put you in a better position to trade.
The Smart Margin Watcher was designed to monitor your positions and ALERTS you if the market goes against your trades and your account equity drops below your margin requirements.
What is margin? Margin can be thought of as a good faith deposit required to maintain open positions. This is not a fee or a transaction cost, it is simply a portion of your account equity set aside and allocated as a margin deposit. Keep in mind that trading on margin can both positively and negatively affect your trading experience as both profits and losses can be dramatically amplified. You can keep track of your Used and Usable margin in the Accounts Window of the Trading Station.SMART MARGIN WATCHER: MANAGE YOUR TRADING ACCOUNT SMARTER
FXCM is committed to increasing customer profitability. We know that our traders are right more than 50% of the time, however many traders lose more money on losing trades than they make on winning trades. FXCM believes that the Smart Margin Watcher feature, one of the newest Trading Station features, can help you stay ahead of Margin Calls and ultimately put you in a better position to trade.
The Smart Margin Watcher was designed to monitor your positions and ALERTS you if the market goes against your trades and your account equity drops below your margin requirements.
About Forex
What is Forex?
Learning to trade in a new market is like learning to speak a new language. It's easier when you have a good vocabulary and understand some basic ideas and concepts. So let's start with the basics of forex trading before moving on to learn how to use the Trading Station. For a more in depth introduction to the forex market, get FXCM's New to Forex Trading Guide.
WHAT AM I DOING WHEN I TRADE FOREX?
Forex is a commonly used abbreviation for "foreign exchange," and it is typically used to describe trading in the foreign exchange market by investors and speculators.
For example, imagine a situation where the U.S. dollar is expected to weaken in value relative to the euro. A forex trader in this situation will sell dollars and buy euros. If the euro strengthens, the purchasing power to buy dollars has now increased. The trader can now buy back more dollars than they had to begin with, making a profit.
This is similar to stock trading. A stock trader will buy a stock if they think its price will rise in the future and sell a stock if they think its price will fall in the future. Similarly, a forex trader will buy a currency pair if they expect its exchange rate will rise in the future and sell a currency pair if they expect its exchange rate will fall in the future.
WHAT IS AN EXCHANGE RATE?
The foreign exchange market is a global decentralized marketplace that determines the relative values of different currencies. Unlike other markets, there is no centralized depository or exchange where transactions are conducted. Instead, these transactions are conducted by several market participants in several locations. It is rare that any two currencies will be identical to one another in value, and it's also rare that any two currencies will maintain the same relative value for more than a short period of time. In forex, the exchange rate between two currencies constantly changes.
Learning to trade in a new market is like learning to speak a new language. It's easier when you have a good vocabulary and understand some basic ideas and concepts. So let's start with the basics of forex trading before moving on to learn how to use the Trading Station. For a more in depth introduction to the forex market, get FXCM's New to Forex Trading Guide.
WHAT AM I DOING WHEN I TRADE FOREX?
Forex is a commonly used abbreviation for "foreign exchange," and it is typically used to describe trading in the foreign exchange market by investors and speculators.
For example, imagine a situation where the U.S. dollar is expected to weaken in value relative to the euro. A forex trader in this situation will sell dollars and buy euros. If the euro strengthens, the purchasing power to buy dollars has now increased. The trader can now buy back more dollars than they had to begin with, making a profit.
This is similar to stock trading. A stock trader will buy a stock if they think its price will rise in the future and sell a stock if they think its price will fall in the future. Similarly, a forex trader will buy a currency pair if they expect its exchange rate will rise in the future and sell a currency pair if they expect its exchange rate will fall in the future.
WHAT IS AN EXCHANGE RATE?
The foreign exchange market is a global decentralized marketplace that determines the relative values of different currencies. Unlike other markets, there is no centralized depository or exchange where transactions are conducted. Instead, these transactions are conducted by several market participants in several locations. It is rare that any two currencies will be identical to one another in value, and it's also rare that any two currencies will maintain the same relative value for more than a short period of time. In forex, the exchange rate between two currencies constantly changes.
WHY DO EXCHANGE RATES CHANGE?
WHY DO EXCHANGE RATES CHANGE?
Currencies trade on an open market, just like stocks, bonds, computers, cars, and many other goods and services. A currency's value fluctuates as its supply and demand fluctuates, just like anything else.
An increase in supply or a decrease in demand for a currency can cause the value of that currency to fall.
A decrease in the supply or an increase in demand for a currency can cause the value of that currency to rise.
A big benefit to forex trading is that you can buy or sell any currency pair, at any time subject to available liquidity. So if you think the Eurozone is going to break apart, you can sell the euro and buy the dollar (sell EUR/USD). If you think the price of gold is going to go up, based on historical correlation patterns you can buy the Australian dollar and sell the U.S. dollar (buy AUD/USD).
This also means that there really is no such thing as a "bear market," in the traditional sense. You can make (or lose) money when the market is trending up or down.
HOW DO YOU READ A QUOTE?
Because you are always comparing one currency to another, forex is quoted in pairs. This may seem confusing at first, but it is actually pretty straightforward. For example, the EUR/USD at 1.4022 shows how much one euro (EUR) is worth in U.S. dollars (USD).
WHAT IS A LOT?
A lot is the smallest trade size available. FXCM accounts have a standard lot size of 1,000 units of currency. Account holders can however place trades of different sizes, so long as they are in increments of 1,000 units like, 2,000, 3,000, 15,000, 112,000 etc.
WHAT IS A PIP?
A pip is the unit you count profit or loss in. Most currency pairs, except Japanese yen pairs, are quoted to four decimal places. This fourth spot after the decimal point (at one 100th of a cent) is typically what one watches to count "pips". Every point that place in the quote moves is 1 pip of movement. For example, if the EUR/USD rises from 1.4022 to 1.4027, the EUR/USD has risen 5 pips.
WHAT IS LEVERAGE/MARGIN?
As mentioned before, all trades are executed using borrowed money. This allows you to take advantage of leverage. Leverage of 400:1 allows you to trade with $1,000 in the market by setting aside only $2.50 as a security deposit. This means that you can take advantage of even the smallest movements in currencies by controlling more money in the market than you have in your account. On the other hand, leverage can significantly increase your losses. Trading foreign exchange with any level of leverage may not be suitable for all investors.
The specific amount that you are required to put aside to hold a position is referred to as your margin requirement. Margin can be thought of as a good faith deposit required to maintain open positions. This is not a fee or a transaction cost, it is simply a portion of your account equity set aside and allocated as a margin deposit. Learn more about FXCM's Margin Requirements.
Currencies trade on an open market, just like stocks, bonds, computers, cars, and many other goods and services. A currency's value fluctuates as its supply and demand fluctuates, just like anything else.
An increase in supply or a decrease in demand for a currency can cause the value of that currency to fall.
A decrease in the supply or an increase in demand for a currency can cause the value of that currency to rise.
A big benefit to forex trading is that you can buy or sell any currency pair, at any time subject to available liquidity. So if you think the Eurozone is going to break apart, you can sell the euro and buy the dollar (sell EUR/USD). If you think the price of gold is going to go up, based on historical correlation patterns you can buy the Australian dollar and sell the U.S. dollar (buy AUD/USD).
This also means that there really is no such thing as a "bear market," in the traditional sense. You can make (or lose) money when the market is trending up or down.
HOW DO YOU READ A QUOTE?
Because you are always comparing one currency to another, forex is quoted in pairs. This may seem confusing at first, but it is actually pretty straightforward. For example, the EUR/USD at 1.4022 shows how much one euro (EUR) is worth in U.S. dollars (USD).
WHAT IS A LOT?
A lot is the smallest trade size available. FXCM accounts have a standard lot size of 1,000 units of currency. Account holders can however place trades of different sizes, so long as they are in increments of 1,000 units like, 2,000, 3,000, 15,000, 112,000 etc.
WHAT IS A PIP?
A pip is the unit you count profit or loss in. Most currency pairs, except Japanese yen pairs, are quoted to four decimal places. This fourth spot after the decimal point (at one 100th of a cent) is typically what one watches to count "pips". Every point that place in the quote moves is 1 pip of movement. For example, if the EUR/USD rises from 1.4022 to 1.4027, the EUR/USD has risen 5 pips.
WHAT IS LEVERAGE/MARGIN?
As mentioned before, all trades are executed using borrowed money. This allows you to take advantage of leverage. Leverage of 400:1 allows you to trade with $1,000 in the market by setting aside only $2.50 as a security deposit. This means that you can take advantage of even the smallest movements in currencies by controlling more money in the market than you have in your account. On the other hand, leverage can significantly increase your losses. Trading foreign exchange with any level of leverage may not be suitable for all investors.
The specific amount that you are required to put aside to hold a position is referred to as your margin requirement. Margin can be thought of as a good faith deposit required to maintain open positions. This is not a fee or a transaction cost, it is simply a portion of your account equity set aside and allocated as a margin deposit. Learn more about FXCM's Margin Requirements.
Friday, March 4, 2016
Foreign exchange fraud
Foreign exchange fraud
From Wikipedia, the free encyclopedia
Foreign exchange fraud is any trading scheme used to defraud traders by convincing them that they can expect to gain a high profit by trading in the foreign exchange market. Currency trading became a common form of fraud early 2008, according to Michael Dunn of the U.S. Commodity Futures Trading Commission.
The foreign exchange market is at best a zero–sum game, meaning that whatever one trader gains, another loses. However, brokerage commissions and other transaction costs are subtracted from the results of all traders, making foreign exchange a negative-sum game.
Contents
1 US Government interventions
2 Types of fraud
3 Increase in fraud
4 Not beating the market
5 High leverage
6 Fraud by country
6.1 United Kingdom
6.2 Cyprus
7 Convicted scammers
8 See also
9 References
10 External links
US Government interventions
In August 2008, the CFTC set up a special task force to deal with growing foreign exchange fraud. In January 2010, the CFTC proposed new rules limiting leverage to 10 to 1, based on " a number of improper practices" in the retail foreign exchange market, "among them solicitation fraud, a lack of transparency in the pricing and execution of transactions, unresponsiveness to customer complaints, and the targeting of unsophisticated, elderly, low net worth and other vulnerable individuals."
In 2012, Christopher Ehrman, an SEC veteran, was selected to run the new SEC Office of the Whistleblower.
Types of fraud
Frauds might include churning of customer accounts for the purpose of generating commissions, selling software that is supposed to guide the customer to large profits, improperly managed "managed accounts", false advertising, Ponzi schemes and outright fraud. It also refers to any retail forex broker who indicates that trading foreign exchange is a low risk, high profit investment.
Increase in fraud[edit]
The U.S. Commodity Futures Trading Commission (CFTC), which loosely regulates the foreign exchange market in the United States, has noted an increase in the amount of unscrupulous activity in the non-bank foreign exchange industry. Between 2001 and 2006 the U.S. Commodity Futures Trading Commission has prosecuted more than 80 cases involving the defrauding of more than 23,000 customers who lost $350 million. From 2001 to 2007, about 26,000 people lost $460 million in forex frauds.
Not beating the market
The foreign exchange market is a zero sum game in which there are many experienced, well-capitalized professional traders (e.g. working for banks) who can devote their attention full-time to trading. An inexperienced retail trader will have a significant information disadvantage compared to these traders.
Retail traders are, almost by definition, undercapitalized. Thus, they are subject to the problem of gambler's ruin: in a "fair game" (one with no information advantages) the player with the lower amount of capital has a higher probability of going bankrupt than a high-capital player. The retail trader always pays the bid/ask spread which makes their odds of winning less than those of a fair game. Additional costs may include margin interest or, if a spot position is kept open for more than one day, the trade may be "resettled" each day, each time costing the full bid/ask spread. In some variations of forex trading, the customers do not obtain normal fungible futures, but instead make a contract with some named company. Even if the company claims to act as their "forex dealer", it is financially interested in making the retail customer lose money. The contract is directly between the customer and the pseudo-dealer, so it is an off-exchange one; it cannot be normally registered and traded on futures exchanges.
Although it is possible for a few experts to successfully arbitrage the market for an unusually large return, this does not mean that a larger number could earn the same returns even given the same tools, techniques and data sources. This is because the arbitrages are essentially drawn from a pool of finite size; although information about how to capture arbitrages is a nonrival good, the arbitrages themselves are a rival good. (To draw an analogy, the total amount of buried treasure on an island is the same, regardless of how many treasure hunters have bought copies of the treasure map.)
High leverage
By offering high leverage some market makers encourage traders to trade extremely large positions. This increases the trading volume cleared by the market maker and increases their profit, but increases the risk that the trader will receive a margin call. While professional currency dealers such as banks and hedge funds tend to use no more than 10:1 leverage, retail clients may be offered leverage between 50:1 and 400:1.
Fraud by country
To aid with transparency, some regulatory authorities publish in to public domain the following: list of regulated companies/firms, warnings to regulated companies, cases opened against regulated companies, fines levied to regulated companies, revocation of companies license as well as general news announcements.
From Wikipedia, the free encyclopedia
Foreign exchange fraud is any trading scheme used to defraud traders by convincing them that they can expect to gain a high profit by trading in the foreign exchange market. Currency trading became a common form of fraud early 2008, according to Michael Dunn of the U.S. Commodity Futures Trading Commission.
The foreign exchange market is at best a zero–sum game, meaning that whatever one trader gains, another loses. However, brokerage commissions and other transaction costs are subtracted from the results of all traders, making foreign exchange a negative-sum game.
Contents
1 US Government interventions
2 Types of fraud
3 Increase in fraud
4 Not beating the market
5 High leverage
6 Fraud by country
6.1 United Kingdom
6.2 Cyprus
7 Convicted scammers
8 See also
9 References
10 External links
US Government interventions
In August 2008, the CFTC set up a special task force to deal with growing foreign exchange fraud. In January 2010, the CFTC proposed new rules limiting leverage to 10 to 1, based on " a number of improper practices" in the retail foreign exchange market, "among them solicitation fraud, a lack of transparency in the pricing and execution of transactions, unresponsiveness to customer complaints, and the targeting of unsophisticated, elderly, low net worth and other vulnerable individuals."
In 2012, Christopher Ehrman, an SEC veteran, was selected to run the new SEC Office of the Whistleblower.
Types of fraud
Frauds might include churning of customer accounts for the purpose of generating commissions, selling software that is supposed to guide the customer to large profits, improperly managed "managed accounts", false advertising, Ponzi schemes and outright fraud. It also refers to any retail forex broker who indicates that trading foreign exchange is a low risk, high profit investment.
Increase in fraud[edit]
The U.S. Commodity Futures Trading Commission (CFTC), which loosely regulates the foreign exchange market in the United States, has noted an increase in the amount of unscrupulous activity in the non-bank foreign exchange industry. Between 2001 and 2006 the U.S. Commodity Futures Trading Commission has prosecuted more than 80 cases involving the defrauding of more than 23,000 customers who lost $350 million. From 2001 to 2007, about 26,000 people lost $460 million in forex frauds.
Not beating the market
The foreign exchange market is a zero sum game in which there are many experienced, well-capitalized professional traders (e.g. working for banks) who can devote their attention full-time to trading. An inexperienced retail trader will have a significant information disadvantage compared to these traders.
Retail traders are, almost by definition, undercapitalized. Thus, they are subject to the problem of gambler's ruin: in a "fair game" (one with no information advantages) the player with the lower amount of capital has a higher probability of going bankrupt than a high-capital player. The retail trader always pays the bid/ask spread which makes their odds of winning less than those of a fair game. Additional costs may include margin interest or, if a spot position is kept open for more than one day, the trade may be "resettled" each day, each time costing the full bid/ask spread. In some variations of forex trading, the customers do not obtain normal fungible futures, but instead make a contract with some named company. Even if the company claims to act as their "forex dealer", it is financially interested in making the retail customer lose money. The contract is directly between the customer and the pseudo-dealer, so it is an off-exchange one; it cannot be normally registered and traded on futures exchanges.
Although it is possible for a few experts to successfully arbitrage the market for an unusually large return, this does not mean that a larger number could earn the same returns even given the same tools, techniques and data sources. This is because the arbitrages are essentially drawn from a pool of finite size; although information about how to capture arbitrages is a nonrival good, the arbitrages themselves are a rival good. (To draw an analogy, the total amount of buried treasure on an island is the same, regardless of how many treasure hunters have bought copies of the treasure map.)
High leverage
By offering high leverage some market makers encourage traders to trade extremely large positions. This increases the trading volume cleared by the market maker and increases their profit, but increases the risk that the trader will receive a margin call. While professional currency dealers such as banks and hedge funds tend to use no more than 10:1 leverage, retail clients may be offered leverage between 50:1 and 400:1.
Fraud by country
To aid with transparency, some regulatory authorities publish in to public domain the following: list of regulated companies/firms, warnings to regulated companies, cases opened against regulated companies, fines levied to regulated companies, revocation of companies license as well as general news announcements.
Forex scandal
Forex scandal
From Wikipedia, the free encyclopedia
Secret trading chatrooms
Don't want other numpty's in mkt to know [about information exchanged within the group], but not only that is he gonna protect us like we protect each other ...
“”
—Citibank trader, on a prospective new member to the cartel chatroom
The forex scandal (also known as the forex probe) is a financial scandal that involves the revelation, and subsequent investigation, that banks colluded for at least a decade to manipulate exchange rates for their own financial gain. Market regulators in Asia, Switzerland, the United Kingdom, and the United States began to investigate the $5.3 trillion-a-day foreign exchange market (forex) after Bloomberg News reported in June 2013 that currency dealers said they had been front-running client orders and rigging the foreign exchange benchmark WM/Reuters rates by colluding with counterparts and pushing through trades before and during the 60-second windows when the benchmark rates are set. The behavior occurred daily in the spot foreign-exchange market and went on for at least a decade according to currency traders.
Contents
1 Investigation
2 Effects
3 Fines
4 Criminal proceedings
5 Reforms
6 See also
7 References
8 External links
Investigation
At the center of the investigation are the transcripts of electronic chatrooms in which senior currency traders discussed with their competitors at other banks the types and volume of the trades they planned to place. The electronic chatrooms had names such as "The Cartel", "The Bandits’ Club", "One Team, One Dream" and "The Mafia". The discussions in the chatrooms were interspersed with jokes about manipulating the forex market and repeated references to alcohol, drugs, and women. Regulators are particularly focusing in on one small exclusive chatroom which was variously called The Cartel or The Mafia. The chatroom was used by some of the most influential traders in London and membership in the chatroom was highly sought after. Among The Cartel's members were Richard Usher, a former Royal Bank of Scotland (RBS) senior trader who went to JPMorgan as head of spot foreign exchange trading in 2010, Rohan Ramchandani, Citigroup’s head of European spot trading, Matt Gardiner, who joined Standard Chartered after working at UBS and Barclays, and Chris Ashton, head of voice spot trading at Barclays. Two of these senior traders, Richard Usher and Rohan Ramchandani, are members of the 13-member Bank of England Joint Standing Committee's chief dealers group.
At least 15 banks including Barclays, HSBC, and Goldman Sachs disclosed investigations by regulators. Barclays, Citigroup, and JPMorgan Chase all suspended or placed on leave senior currency traders. Deutsche Bank, continental Europe’s largest lender, was also cooperating with requests for information from regulators. Barclays, Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, Lloyds, RBS, Standard Chartered, UBS and the Bank of England as of June 2014 had suspended, placed on leave, or fired some 40 forex employees. Citigroup had also fired its head of European spot foreign exchange trading, Rohan Ramchandani. Reuters reported hundreds of traders around the world could be implicated in the scandal.
Effects
The monetary losses caused by manipulation of the forex market has been estimated to represent $11.5 billions-a-year for Britain’s 20.7 million pension holders alone (£7.5B/year).[15][not in citation given] The manipulations affected customers all around the world, for over a decade. The manipulations' overall estimated cost is not yet fully known.
Fines
[show]Fines imposed by authorities in
the UK, US, and Switzerland
on banks in relation to the Forex Scandal
On 12 November 2014, the United Kingdom's Financial Conduct Authority (FCA) imposed fines totaling $1.7 billion on five banks for failing to control business practices in their G10 spot foreign exchange trading operations, specifically: Citibank $358 million, HSBC $343 million, JPMorgan $352 million, RBS $344 million and UBS $371 million. The FCA determined that between 1 January 2008 and 15 October 2013 the five banks failed to manage risks around client confidentiality, conflict of interest, and trading conduct. The banks used confidential customer order information to collude with other banks to manipulate the G10 foreign exchange currency rates and profit illegally at the expense of their customers and the market. On the same day the United States Commodity Futures Trading Commission (CFTC) in coordination with the FCA imposed collective fines of $1.4 billion against the same five banks for attempted manipulation of, and for aiding and abetting other banks’ attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders. The CFTC specifically fined: $310 million each for Citibank and JPMorgan, $290 million each for RBS and UBS, and $275 million for HSBC.
The CFTC found that currency traders at the five banks coordinated their trading with traders at other banks in order to manipulate the foreign exchange benchmark rates, including the 4 p.m. WM/Reuters rates. Currency traders at the banks used private chatrooms to communicate and plan their attempts to manipulate the foreign exchange benchmark rates. In these chatrooms, traders at the banks disclosed confidential customer order information and trading positions, changed trading positions to accommodate the interests of the collective group, and agreed on trading strategies as part of an effort by the group to manipulate different foreign exchange benchmark rates. These chatrooms were often exclusive and invitation only.
On 20 May 2015, the five banks pleaded guilty to felony charges by the United States Department of Justice and agreed to pay fines totaling more than $5.7 billion. Four of the banks, including Barclays, Citigroup, JP Morgan, and Royal Bank of Scotland pleaded guilty to manipulation of the foreign markets; while the others had already been fined in settlements from the November 2014 investigation, Barclays had not been involved and was fined for $2.4 billion. UBS also pleaded guilty to committing wire fraud and agreed to a $203 million fine. A sixth bank, Bank of America, while not found guilty, agreed to a fine of $204 million for unsafe practices in foreign markets.
On 18 November 2015 Barclays was fined an additional $150m for automated electronic foreign exchange misconduct.
Criminal proceedings
On 19 December 2014 the first known arrest was made in relation to the scandal. The arrest of a former RBS trader took place in Billericay, Essex, and was conducted by City of London Police and the Serious Fraud Office.
Reforms
Respective authorities have announced remediation programmes aimed at repairing trust in their banking systems and the wider foreign exchange market place. In the United Kingdom the FCA has stated that the changes to be made at each firm will depend on a number of factors, including the size of the firm, its market share, impact, remedial work already undertaken, and the role the firm plays in the market. The remediation programme will require firms to review their IT systems in relation to their spot FX business, as the banks currently rely on legacy technologies that allow for the existence of dark-data silos within which manipulation is able to occur unnoticed by compliance systems. In Switzerland the Swiss Financial Market Supervisory Authority has announced that for a period of two years UBS will be limited to a maximum annual variable compensation to 200% of the basic salary for foreign exchange and precious metals employees globally. UBS is instructed to automate at least 95% of its global foreign exchange trading, while effective measures must be taken to manage conflicts of interest with a particular focus on organisational separation of client and proprietary trading.
From Wikipedia, the free encyclopedia
Secret trading chatrooms
Don't want other numpty's in mkt to know [about information exchanged within the group], but not only that is he gonna protect us like we protect each other ...
“”
—Citibank trader, on a prospective new member to the cartel chatroom
The forex scandal (also known as the forex probe) is a financial scandal that involves the revelation, and subsequent investigation, that banks colluded for at least a decade to manipulate exchange rates for their own financial gain. Market regulators in Asia, Switzerland, the United Kingdom, and the United States began to investigate the $5.3 trillion-a-day foreign exchange market (forex) after Bloomberg News reported in June 2013 that currency dealers said they had been front-running client orders and rigging the foreign exchange benchmark WM/Reuters rates by colluding with counterparts and pushing through trades before and during the 60-second windows when the benchmark rates are set. The behavior occurred daily in the spot foreign-exchange market and went on for at least a decade according to currency traders.
Contents
1 Investigation
2 Effects
3 Fines
4 Criminal proceedings
5 Reforms
6 See also
7 References
8 External links
Investigation
At the center of the investigation are the transcripts of electronic chatrooms in which senior currency traders discussed with their competitors at other banks the types and volume of the trades they planned to place. The electronic chatrooms had names such as "The Cartel", "The Bandits’ Club", "One Team, One Dream" and "The Mafia". The discussions in the chatrooms were interspersed with jokes about manipulating the forex market and repeated references to alcohol, drugs, and women. Regulators are particularly focusing in on one small exclusive chatroom which was variously called The Cartel or The Mafia. The chatroom was used by some of the most influential traders in London and membership in the chatroom was highly sought after. Among The Cartel's members were Richard Usher, a former Royal Bank of Scotland (RBS) senior trader who went to JPMorgan as head of spot foreign exchange trading in 2010, Rohan Ramchandani, Citigroup’s head of European spot trading, Matt Gardiner, who joined Standard Chartered after working at UBS and Barclays, and Chris Ashton, head of voice spot trading at Barclays. Two of these senior traders, Richard Usher and Rohan Ramchandani, are members of the 13-member Bank of England Joint Standing Committee's chief dealers group.
At least 15 banks including Barclays, HSBC, and Goldman Sachs disclosed investigations by regulators. Barclays, Citigroup, and JPMorgan Chase all suspended or placed on leave senior currency traders. Deutsche Bank, continental Europe’s largest lender, was also cooperating with requests for information from regulators. Barclays, Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, Lloyds, RBS, Standard Chartered, UBS and the Bank of England as of June 2014 had suspended, placed on leave, or fired some 40 forex employees. Citigroup had also fired its head of European spot foreign exchange trading, Rohan Ramchandani. Reuters reported hundreds of traders around the world could be implicated in the scandal.
Effects
The monetary losses caused by manipulation of the forex market has been estimated to represent $11.5 billions-a-year for Britain’s 20.7 million pension holders alone (£7.5B/year).[15][not in citation given] The manipulations affected customers all around the world, for over a decade. The manipulations' overall estimated cost is not yet fully known.
Fines
[show]Fines imposed by authorities in
the UK, US, and Switzerland
on banks in relation to the Forex Scandal
On 12 November 2014, the United Kingdom's Financial Conduct Authority (FCA) imposed fines totaling $1.7 billion on five banks for failing to control business practices in their G10 spot foreign exchange trading operations, specifically: Citibank $358 million, HSBC $343 million, JPMorgan $352 million, RBS $344 million and UBS $371 million. The FCA determined that between 1 January 2008 and 15 October 2013 the five banks failed to manage risks around client confidentiality, conflict of interest, and trading conduct. The banks used confidential customer order information to collude with other banks to manipulate the G10 foreign exchange currency rates and profit illegally at the expense of their customers and the market. On the same day the United States Commodity Futures Trading Commission (CFTC) in coordination with the FCA imposed collective fines of $1.4 billion against the same five banks for attempted manipulation of, and for aiding and abetting other banks’ attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders. The CFTC specifically fined: $310 million each for Citibank and JPMorgan, $290 million each for RBS and UBS, and $275 million for HSBC.
The CFTC found that currency traders at the five banks coordinated their trading with traders at other banks in order to manipulate the foreign exchange benchmark rates, including the 4 p.m. WM/Reuters rates. Currency traders at the banks used private chatrooms to communicate and plan their attempts to manipulate the foreign exchange benchmark rates. In these chatrooms, traders at the banks disclosed confidential customer order information and trading positions, changed trading positions to accommodate the interests of the collective group, and agreed on trading strategies as part of an effort by the group to manipulate different foreign exchange benchmark rates. These chatrooms were often exclusive and invitation only.
On 20 May 2015, the five banks pleaded guilty to felony charges by the United States Department of Justice and agreed to pay fines totaling more than $5.7 billion. Four of the banks, including Barclays, Citigroup, JP Morgan, and Royal Bank of Scotland pleaded guilty to manipulation of the foreign markets; while the others had already been fined in settlements from the November 2014 investigation, Barclays had not been involved and was fined for $2.4 billion. UBS also pleaded guilty to committing wire fraud and agreed to a $203 million fine. A sixth bank, Bank of America, while not found guilty, agreed to a fine of $204 million for unsafe practices in foreign markets.
On 18 November 2015 Barclays was fined an additional $150m for automated electronic foreign exchange misconduct.
Criminal proceedings
On 19 December 2014 the first known arrest was made in relation to the scandal. The arrest of a former RBS trader took place in Billericay, Essex, and was conducted by City of London Police and the Serious Fraud Office.
Reforms
Respective authorities have announced remediation programmes aimed at repairing trust in their banking systems and the wider foreign exchange market place. In the United Kingdom the FCA has stated that the changes to be made at each firm will depend on a number of factors, including the size of the firm, its market share, impact, remedial work already undertaken, and the role the firm plays in the market. The remediation programme will require firms to review their IT systems in relation to their spot FX business, as the banks currently rely on legacy technologies that allow for the existence of dark-data silos within which manipulation is able to occur unnoticed by compliance systems. In Switzerland the Swiss Financial Market Supervisory Authority has announced that for a period of two years UBS will be limited to a maximum annual variable compensation to 200% of the basic salary for foreign exchange and precious metals employees globally. UBS is instructed to automate at least 95% of its global foreign exchange trading, while effective measures must be taken to manage conflicts of interest with a particular focus on organisational separation of client and proprietary trading.
Finance
Finance
Foreign exchange markets, where money in one currency is exchanged for another
Exchange rate, the price for which one currency is exchanged for another
Foreign exchange reserves, holdings of other countries' currencies
Foreign exchange controls, controls imposed by a government on the purchase/sale of foreign currencies
Retail foreign exchange platform, speculative trading of foreign exchange by individuals using electronic trading platforms
Foreign exchange risk, arises from the change in price of one currency against another
International trade, the exchange of goods and services across national boundaries
Foreign exchange company, a broker that offers currency exchange and international payments
Bureau de change, a business whose customers exchange one currency for another
Currency pair, the quotation of the relative value of a currency unit against the unit of another currency in the foreign exchange market
Digital currency exchanger, market makers which exchange fiat currency for electronic money
Media
Foreign Exchange (1970 film), a British television film
Foreign Exchange (2008 film), a 2008 film starring Jennifer Coolidge
Foreign Exchange (CNBC World), a television news series on CNBC World
Foreign Exchange (TV series), television show made by Southern Star Entertainment
Foreign Exchange (US TV series), a weekly public television show in the US, previously hosted by Fareed Zakaria
The Foreign Exchange, a hip-hop duo
Other uses
Foreign exchange service (telecommunications), connection of a phone to a non-local office
Foreign student exchange, a school program in which students study in another country for a time
FC Forex Brașov, a Romanian professional football club from Braşov.
Foreign exchange markets, where money in one currency is exchanged for another
Exchange rate, the price for which one currency is exchanged for another
Foreign exchange reserves, holdings of other countries' currencies
Foreign exchange controls, controls imposed by a government on the purchase/sale of foreign currencies
Retail foreign exchange platform, speculative trading of foreign exchange by individuals using electronic trading platforms
Foreign exchange risk, arises from the change in price of one currency against another
International trade, the exchange of goods and services across national boundaries
Foreign exchange company, a broker that offers currency exchange and international payments
Bureau de change, a business whose customers exchange one currency for another
Currency pair, the quotation of the relative value of a currency unit against the unit of another currency in the foreign exchange market
Digital currency exchanger, market makers which exchange fiat currency for electronic money
Media
Foreign Exchange (1970 film), a British television film
Foreign Exchange (2008 film), a 2008 film starring Jennifer Coolidge
Foreign Exchange (CNBC World), a television news series on CNBC World
Foreign Exchange (TV series), television show made by Southern Star Entertainment
Foreign Exchange (US TV series), a weekly public television show in the US, previously hosted by Fareed Zakaria
The Foreign Exchange, a hip-hop duo
Other uses
Foreign exchange service (telecommunications), connection of a phone to a non-local office
Foreign student exchange, a school program in which students study in another country for a time
FC Forex Brașov, a Romanian professional football club from Braşov.
Forex bink
Forex Bank
From Wikipedia, the free encyclopedia
Forex Bank AB
Forex bank logo.gif
Type
Private aktiebolag
Founded 1927
Number of employees
1 238 (2013)
Website www.forex.se/en/
Forex in Aalborg, Denmark (2009).
FOREX Bank is a Swedish financial services company specialising in currency exchange services. The company was started in 1927 providing services for travellers, at the Central Station in Stockholm. The owner of Gyllenspet's Barber Shop, according to the legend, discovered that most of his customers were tourists in need of currency for their trips. The owner began keeping the major currencies on hand.
The company was subsequently acquired by Statens Järnvägar, the Swedish State Railways, which expanded the operations until it was sold to Rolf Friberg in 1965. The company was for many years the only one apart from the banks that was licensed to conduct currency exchange in Sweden.
The company, which is still wholly owned by the Friberg family, has expanded into Finland (1993), Denmark (1994) and Norway (2004) and has 130 shops, located at railway stations or airports, shopping malls and other hubs. In 2003, the company extended its business into banking and can also offer current and savings accounts incl internet and mobile banking, loans, debit and credit cards, cash handling, money transfer and payments.
From Wikipedia, the free encyclopedia
Forex Bank AB
Forex bank logo.gif
Type
Private aktiebolag
Founded 1927
Number of employees
1 238 (2013)
Website www.forex.se/en/
Forex in Aalborg, Denmark (2009).
FOREX Bank is a Swedish financial services company specialising in currency exchange services. The company was started in 1927 providing services for travellers, at the Central Station in Stockholm. The owner of Gyllenspet's Barber Shop, according to the legend, discovered that most of his customers were tourists in need of currency for their trips. The owner began keeping the major currencies on hand.
The company was subsequently acquired by Statens Järnvägar, the Swedish State Railways, which expanded the operations until it was sold to Rolf Friberg in 1965. The company was for many years the only one apart from the banks that was licensed to conduct currency exchange in Sweden.
The company, which is still wholly owned by the Friberg family, has expanded into Finland (1993), Denmark (1994) and Norway (2004) and has 130 shops, located at railway stations or airports, shopping malls and other hubs. In 2003, the company extended its business into banking and can also offer current and savings accounts incl internet and mobile banking, loans, debit and credit cards, cash handling, money transfer and payments.
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