Disliked{quote} So FXCM was not in compliance with CFTC regulations for years by offering negative balance protection to U.S. clients and by forgiving negative balance of U.S. clients in the SNB event? I applaud FXCM for honoring their negative balance protection during the SNB event, from a client's perspective. However, by continuing to offer negative balance protection to clients of other countries, wouldn't this put investors at risk and at a loss? As well as clients if funds are not segregated? How much did FXCM lose because of the negative balance...Ignored
It was FXCM's decision to forgive the majority of traders negative balances after the SNB event. In the UK and Australia, we still maintain a negative balance policy but it is capped at $50,000 per client. This protection cannot be extended to US clients because of CFTC regulation 5.16 which states that a broker may not in any way represent that it will guarantee against losses.
Jason