The total list of US forex brokers

Why most forex brokers don’t deal with US citizens and ways to overcome it

Being American is a great advantage in most cases when you go abroad. You can travel wherever you want, your money is accepted everywhere. More often than not, you can expect locals to speak your language and have less money than you. If you get in trouble you can rely on the most powerful armed force to come to your rescue not to mention Chuck Norris and Captain America. And since you live in a democracy, once every 4 years you can choose which of the 2 carefully pre-selected miserable thugs will be your president in the next 4 years. It’s generally a good thing.

But when it comes to forex trading, it really sucks.

Why? Because most brokers freak out at the very moment you mention you are a proud son or daughter of America. They wish you the best of luck and close the chat window. It’s worse than being invisible, you are the skunk of forex traders.

skunk-1239764_1280

The bad news: it’s because of the law buddy. You can read more about the legal background at the end of the article, but to sum it up in one sentence: American traders can be served only by American brokers. Patriotism at its best.

What options do you have?

0. Things that won’t work – Beginners’ Playbook

No, you cannot hide your nationality or give a fake address on the online application form. The broker will ask for a photocopy of your passport, utility bill or other proof of residence.

No, it’s not a good idea to use your Brit/Aussie friend’s identity even if you manage to take photos of his/her IDs. Most brokers don’t allow withdrawals to third-party bank accounts, so you might end up in a situation where you can transfer your funds only to your friend’s account. Then you will have an awkward conversation..

No it’s not enough if you incorporate a company abroad. As long as you are the owner of the company, CFTC and IRS will still care about you and brokers won’t deal with you.

1. Not really legal option – Wizards of the Caribbean

Welcome to the grey zone. There are some companies that specialize in “asset structuring” for US citizens. It usually involves some sort of trust or company that is owned and run by – and here’s the rub – NOT you. In most cases the whole thing is incorporated on some funny island where you always wanted to go for an all-inclusive 4-star week, but going outside the resort with more than 20$ cash in the pocket is just plain gambling.

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You can expect that some very friendly local guy (let’s call him Carlos) will be the owner and/or director of your company, he will likely hold the same position in around 100-150 similar companies, that’s what you would call “proven experience”. I don’t want to dwell too much on such offshore structures as most of off-shore business is not related to forex trading. Nor will I endorse or place links to such companies, you can google it for yourself.

Recommendation: Honestly, I don’t think they are worth the risk. Offshore services are generally expensive, and you are playing a game of what I call “inverse lottery”. You will get “some” gains in most cases (tax-free income, more freedom on investments), but might lose big sometimes, mainly when Carlos stops answering your calls. Then you realize there’s not much official connection between you and your money. It’s a feature turning into a bug. And then you will want to file a complaint but will realize que la autoridad financiera solamente acepta quejas en español y tú no lo hablas con fluidez. Lo cagaste.

You get me? You don’t? Now you get me.

Even if you carefully set up your structure on an English-speaking island or peninsula, suing is clearly not an option as you would instantly turn yourself in for tax-evasion, money laundering and who knows what else. And I can assure you Carlos knows it well too.

Even if Carlos performs his duties well, you might end up in an awkward situation if the whole structure somehow got unveiled and you need to explain your case to some black-suited guy on federal payroll. Just google for “Mossack Fonseca scandal news”.

2. Still not quite legal option – the Canadians, yet again!

It’s the same scenario as Option 1- you ask, say a Canadian friend to open an account  in his name and then let you know the login credentials.

greenlanders-908841_1280

Sounds good, but still barely legal. Due to anti money-laundering laws your friend will be asked about the beneficial owner of the funds. Either s/he declares the funds are his/hers (which is a lie) or s/he admits the funds are yours and the broker will cease the process right there. You can, of course, officially “lend” that money to the friend for an infinite period of time with no interest, but who would sign an agreement like that?

You can also expect that you cannot directly fund the trading account as most brokers don’t accept third-party wire transfers. The same goes for withdrawing funds but the key issue here is trust yet again. Nothing stops your friend from asking for a new password at the broker’s customer care and taking control over your account.

Recommendation: Honestly, if I were that friend, I wouldn’t do it, would you? This account in his/her name causes nothing but headaches when it comes to moving funds, preparing tax returns, and communicating with the broker.

3. Trading with a broker who doesn’t care

So your broker has tough balls.. If you are dealing with a broker who doesn’t mind you are US citizen AND you don’t see them among the CFTC licensed brokers it’s time to run away. There are some barely legal brokers who usually lack any kind of regulation and deliberately go against the law. You will never be able to force them to send your money back. You can threaten them with legal action, but they will disappear when things get tight. This is their business model.

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4. Boring legal option – Trading with American broker

A totally legal method, finally. Don’t give up, there are some forex brokers in the US who survived both Katrina in 2005 and the Dodd-Frank Act in 2010. Not many though. You can find a link to the actual full list of CFTC licensed brokers at the end of the article.

The total list of forex brokers who can deal with US clients

Let me introduce 3 categories first, since this is how NFA categorizes its members.

Forex firms

They can offer forex trading, but cannot be the counterparty of these trades. In plain English, it means they are “retailers” and they will have to give up all your trades to a “wholesale” broker, who can either absorb it or give it up to their prime broker.

Forex dealer members (FDMs) or Retail Forex Dealers (RFEDs)

They are the retail & wholesale guys. There is a significant difference between FDMs and RFEDs, but from a forex trader’s point of view it’s irrelevant. While RFEDs can deal only in spot forex products, FDMs are allowed to deal in other asset classes like futures, options – further limitations and restrictions of their business activity may apply, obviously.

Here is a list that is relevant at the time of this post’s publication.

FDMs and RFEDs:

FXCM – oh well, they got expelled from the US by CFTC lately
Gain Capital
Interactive Brokers
Oanda
TD Ameritrade

Forex firms:

There are an additional 163 forex firms permitted to offer forex trading, see below. Please keep in mind, having trading permission doesn’t necessarily mean they all actually offer forex trading.

I am in the middle of querying these firms for more info about their retail offerings, I will add their typical EURUSD spread, commission and some other important factors soon. Please leave your email address and/or join the TradeProofer community and you will  be notified whenever the post is updated.

NFA FIRM ID FIRM NAME
495558 ACADEMIA CAPITAL LLC
360 ADM INVESTOR SERVICES INC
465270 ADVALCORE INC
437700 AIO CAPITAL LLC
468072 AK FINANCIAL HOLDINGS INC
481899 ALGOALPHA CAPITAL LLC
458087 ALPHA CAPITAL VENTURES LLC
457189 AMBASSADOR CAPITAL MANAGEMENT LLC
294293 AMERI GROUP FINANCIAL SVS LLC
412490 AMP GLOBAL CLEARING LLC
213616 APPL INTERNATIONAL INC
314612 ARCA CAPITAL INVESTMENTS INC
358522 AVAIL TRADING CORP
430910 BCD FOREX INVESTMENTS LLC
404507 BELLWETHER CAPITAL MANAGEMENT LP
264961 BEVERLY HILLS TRADING INC
465272 BLACK MANGROVE CAPITAL MANAGEMENT LLC
227478 BMO ASSET MANAGEMENT CORP
424212 BRIGHTWORK FINANCIAL SERVICES LLC
357061 BROKER JUNCTION SERIES LLC
436545 BTG PACTUAL US CAPITAL LLC
327631 BULLTICK LLC
488491 BYNANE, PAUL
392965 CAMDUSTRIES LLC
364051 CAMPBELL & COMPANY INVESTMENT ADVISER LLC
2631 CAMPBELL & COMPANY LP
1720 CAMPBELL, DONALD KEITH
216708 CANNON TRADING COMPANY INC
313199 CAPITAL MARKET SERVICES LLC
432712 CHELONA CAPITAL GP LLC
402075 COBRA TRADING INC
401602 COLLECTIVE2 LLC
438987 CONTINGENT MACRO ADVISORS LLC
324375 CONVERGEX EXECUTION SOLUTIONS LLC
423967 COWEN PRIME SERVICES LLC
480076 CYGNUS TRADING ADVISORS LLC
492229 DALE INVESTMENT MANAGEMENT LTD
361173 DANG, KY
268560 DEARBORN CAPITAL MANAGEMENT LLC
253977 DENALI ASSET MANAGEMENT LLLP
495560 DESERTSCAPE ASSET MANAGEMENT COMPANY LLC
465800 DICONIA FUND LP
458920 DRIVEWEALTH LLC
241277 DRURY CAPITAL INC
489996 DYNAMIC CAPITAL EXPRESS LLC
252185 E TRADE CLEARING LLC
320906 E TRADE SECURITIES LLC
248697 EAGLE TRADING SYSTEMS INC
418103 EXCEL MARKETS INC
489288 EYRIES CAPITAL LLC
465768 EZ SIGNAL INC
265977 FARR FINANCIAL INC
342002 FAST TRADING SERVICES LLC
372539 FIELDHOUSE CAPITAL MANAGEMENT INC
495589 FINTECH INVESTMENT GROUP INC
495938 FINTUE INC
307930 FOREMOST TRADING LLC
416496 FORTRESS CAPITAL INC
491342 FORTUNA OAK ASSOCIATES LLC
405540 FOUR ELEMENTS CAPITAL PTE LTD
491174 FREEMAN CAPITAL MANAGEMENT LLC
492854 FUNDSEEDER INVESTMENTS LLC
322531 FUTUREPATH TRADING LLC
421241 FX PROPHET LLC
382286 GAR WOOD SECURITIES LLC
402367 GECKO FINANCIAL SERVICES INC
467333 GEMINI ALTERNATIVE FUNDS LLC
485136 GLACIER CAPITAL MANAGEMENT LLC
338681 GLOBAL ASSET ADVISORS LLC
289721 GLOBAL FUTURES EXCHANGE & TRADING CO INC
418581 GOLD STREET TRADING LIMITED
402025 GRANDSTONE CORPORATION
479264 HALIFAX AMERICA LLC
307725 HARPOON CAPITAL CORP
475268 HATTERAS FUNDS LP
470182 HECTERION TRADE MANAGEMENT LLC
483147 HOBBLE CREEK CAPITAL MANAGEMENT LLC
484902 I CONTROL MONEY LLC
409896 IBN FINANCIAL SERVICES INC
266569 INFINITY FUTURES LLC
457288 INFINITY SQUARED INVESTMENTS LLC
245008 INSTITUTIONAL ADVISORY SERVICES GROUP INC
464195 INTERACTIVE INVESTMENTS LLC
466835 JERICHO TRADING LLC
440121 JP GLOBAL CAPITAL MANAGEMENT LLC
479629 KAMIDO CAPITAL LLC
403747 KAWA CAPITAL MANAGEMENT INC
493983 KIM, HYUCK
482652 KMC WEALTH MANAGEMENT LLC
364262 LAZZARA CONSULTING INC
417597 LEVERAGEFX LLC
474396 LINNIS GP LLC
497828 LION CROWN CAPITAL MANAGEMENT LTD
493533 MARK ANTHONY TRADING COMPANY LLC
461520 MASON DEAN CAPITAL LLC
403917 MATARAZZO, ROBERT
315389 MB TRADING FUTURES LLC
309067 MELVIN, WILLIAM DANIEL
425570 MINLYN LLC
339976 MIRUS FUTURES LLC
428747 MYRMIDON CAPITAL MANAGEMENT LLC
367174 NCMFX INC
474983 NEWGATE GLOBAL MARKETS LLC
488174 NOR GLOBAL GROUP LLC
438113 ODESSA CAPITAL MANAGEMENT LLC
474767 PARAGON GLOBAL MARKETS LLC
425111 PENSO ADVISORS LLC
422202 PHILLIP CAPITAL INC
481278 POSEIDON CAPITAL MANAGEMENT LLC
472644 PROAXIS FUND
489561 PROVISION GLOBAL CAPITAL LLC
498468 QQV CAPITAL MANAGEMENT LLC
431162 QTS CAPITAL MANAGEMENT LLC
466715 QYU HOLDINGS CORPORATION THE
481105 R SQUARED MACRO MANAGEMENT LLC
210597 RABAR MARKET RESEARCH INC
425065 RELIANCE CAPITAL MARKETS II LLC
187 RJ OBRIEN ASSOCIATES LLC
1262 ROBBINS FUTURES INC
441466 ROW ASSET MANAGEMENT LLC
232832 RTY TRADING GROUP INC
482047 SANTA CRUZ CAPITAL MANAGEMENT LLC
423988 SC CAPITAL MANAGEMENT LLC
452522 SEACAP SECURITIES LLC
488667 SEAVIEW HOLDINGS LLC
304395 SEGALL BRYANT & HAMILL LLC
426782 SGW CAPITAL MANAGEMENT LLC
463649 SMJ CAPITAL MANAGEMENT LTD
458091 STERLING ASSET MANAGEMENT INC
417463 SWEET FUTURES 1 LLC
411141 SYSTRA LLC
465334 T3 SECURITIES INC
1466 TACTICAL INVESTMENT MANAGEMENT CORP
460359 TALEI CAPITAL LLC
446185 TARCAN CAPITAL LLC
435699 TEN YARD CAPITAL LLC
467960 TEREBELLUM INVESTMENT GROUP LLC
493160 TFO MANAGER LIMITED
424572 TIME SERIES FX LLC
494549 TIVERTON TRADING INC
270490 TJM INSTITUTIONAL SERVICES LLC
387000 TORON INTERNATIONAL GROUP LTD
379304 TRADE INTEGRATION LLC
408077 TRADEKING FOREX LLC
403756 TRADENCY USA INC
468913 TREND FINANCIAL SOLUTIONS INC
466053 TRINITY TRADING GROUP LLC
490392 UNIQUE FOREX SOLUTIONS LLC
428395 V50 CAPITAL MANAGEMENT LLC
431482 VAEL ASSET MANAGEMENT LLC
447755 VALCAPITAL LTD
402215 VALHALLA CAPITAL GROUP LLC
312722 VANKAR TRADING CORP
422000 WALLEYE TRADING ADVISORS LLC
467075 WEALTH OPPORTUNITIES CAPITAL MANAGEMENT LLC
86156 WEDBUSH SECURITIES INC
445196 WHITMORE CAPITAL MANAGEMENT LLC
270183 WILLOWBRIDGE ASSET MANAGEMENT INC
209826 WILLOWBRIDGE ASSOCIATES INC
245133 WILLOWBRIDGE DOUBLEWOOD INC
425110 WILLOWBRIDGE GLOBAL INC
422250 WORLD CURRENCY INVESTMENT GROUP LLC
1951 ZANER GROUP LLC

If you don’t see a company above, don’t worry, probably they got into business after I published this post. Here’s the total, actual list of NFA members and CFTC registrants.

If you don’t see a company in the actual list either, it’s time to worry. Drop me an email to feedback@tradeproofer.com and will take a look at them.

Useful tool – financial background check:

CFTC publishes their financial situation monthly, don’t forget to check your favourite broker here.

Useful tool – regulatory status check:

Also, before you open account, check your broker’s regulatory status here.

Should I go to the wholesale guys directly to get wholesale price?

Not necessarily. You have 2 factors to consider:

  • Forex trading is a highly competitive industry on the wholesale level as everybody is selling the same hamburger at the end of the day. Even wholesale companies separate their retail offering from their institutional one so you won’t get wholesale pricing unless you deliver wholesale trading volume. On the other hand, if you are an active trader with considerable trading volume I would strongly recommend haggling a bit with your broker and don’t settle on their public offering as is.
  • Some forex firms specialize. They can offer value-added services, more sophisticated trading platform, super-fast customer care, superb research with Rockstar analysts, social trading and so on. You need to understand your needs first in order to be able to pick your own best forex broker.

Appendix – Legal background

Below I write a brief explanation of the regulative bodies and legal framework. However, I do not aspire to rewrite Investopedia or Wikipedia, so I’d rather place links to the relevant Wikipedia articles and the organizations’ website.

CFTC- Commodity Futures Trading Commission

US government agency. They supervise the futures and options trading in the US. Forex trading belongs to their portfolio too, unless the firm is already regulated by SEC due to other business activities.

CFTC on Wikipedia
CFTC website

NFA – National Futures Association

Self-regulatory organization. They have developed rules, processes and standards to maintain the same professional standard among association members. Membership is mandatory for futures, swap, options and forex broker/dealers.

NFA on Wikipedia
NFA website

SEC – Securities and Exchange Commission

US government agency, just like CFTC. It’s just they supervise securities trading, like stocks, bonds.

SEC on Wikipedia
SEC website

Just to sum it up, SEC and CFTC are government agencies, paid by US taxpayers, NFA is a self-regulatory organization paid by the member firms.  While SEC supervises mainly securities trading, CFTC covers futures and forex, there is some overlap though.

FATCA

Don’t use this word in Switzerland! You might get mobbed especially in the banking districts! FATCA is an American act forcing financial institutions all around the world to cooperate with IRS and disclose just about everything about their US citizen clients.

In plain English, if you happened to have an insignificant amount on an insignificant account with a significant Swiss bank and you happened to forget to declare it in your annual chit-chat with the IRS for decades; well, FATCA kindly reminds (read: forces) your Swiss bank to fix it and disclose all necessary information about you. So the IRS could do the nasty paperwork without bothering you, isn’t that nice of them?

FATCA made entire business branches and “financial product lines” in financial havens obsolete but as a side effect, brokers all around the world have to carefully consider whether they want to bother with US citizens and all the paperwork that entails, or just let them go and close the chat window.

FATCA on Wikipedia

The Dodd-Frank Act

This act addresses lots of issues about financial stability but from our point of view, the most relevant change it effected was that Americans can trade forex only with brokers regulated by CFTC. The act doesn’t explicitly exclude non-American brokers, it’s just they have to apply to NFA membership and fully comply with CFTC rules and regulation.

Hence, there are some non-American brokers who decided to undertake the burden of American regulation. Not many though.

Dodd-Frank Act on Wikipedia
Dodd-Frank Act text

Old regulation

One has to admit that the spirit of the old legislation was the same. Under Regulation S of the Securities Act 1933 the SEC prohibits, among other things, foreign financial institutions that are not registered and regulated in the US abroad from soliciting US residents as clients. This does not mean they cannot accept US residents but that act was written in 1933 when Hitler won the election in Germany, so the short-sighted lawmakers didn’t give special attention to address online sales channels and cross-border business activities. Thus, the common practice was that brokers were not permitted to directly solicit US residents but could deal with Americans if they actively reached out the broker.

Securities Act

 

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