Alex Krishtop I believe you are referring to the expiration of SEC rule 15b12-1, which allowed leveraged retail forex transactions between a broker and US retail clients.

As of July 31, brokers are not allowed to enter into a forex transaction with a party that is not an Eligible Contract Participant.

In short, as an individual you must have aggregate amounts of more than $10 million invested on a discretionary basis or $5 million if hedging, to become an Eligible Contract Participant.

I have similar questions. Do other brokers have to discontinue retail forex trading anytime soon?

What are the options for US traders that do not qualify as an ECP? Offshore account? Which ones are stable and allow US traders?

If there are there any US forex traders in the group that used IB as broker and moved elsewhere, or can share their view on the regulations regarding fx then I would like to know more about it.

This was an eventuality. IB was the last DMA retail forex broker for US residents. So now you are stuck with the so-called big 3: Forex. Com [Gain capital], FXCM, and Oanda. Basically the big boys are closing off forex to smaller guys to enter.

Of course commodity brokers can give any daytrading margins they want to without restrictions. No competition from otc forex, plus you get currency control as a bonus to help keep investors inside your country (Japan has similar restrictions). I would be reluctant to trade with any of those big-3....some good PoPs or 3rd tier brokers with PoP access, unless you are ok with your trades being bucketed.

BabyPips has a thread dedicated to escaping the CFTC. Google 'babypips escape cftc'. Unfortunately, the thread is exclusively for brokers who will accept US residents directly, which makes the list very small and the quality of the brokers questionable. To get to the good quality brokers....

I wrote an article about not relying only on regulation or name along to evaluate brokers: http://www.stevehopwoodforex.com/phpBB3/viewtopic.php?f=52&t=1394&start=1720#p146378 DMA is critical to avoid conflict of interest.

The good quality non-US brokers will likely be in UK, Swiss, AUS, NZ, and occassionally Cyprus. You will either need to use an IBC, or establish residency not in USA and use those credentials to open trading acct. Trading through a family member might also be recommended, but based on trust.

I strongly recommend using a broker with a Prime of Prime (PoP) or prime broker clearing. Invast Global and Global Prime are 2 mt4 brokers who i've seen with real PB relationships, which are getting harder to cultivate these days. RubixFx is another runner up and i know a few more. Look beyond the flashy websites and terminology and focus on the people BEHIND the brokerage...this keeps you from being conned.

Thanks Jon for this info!

IB is NOT a DMA broker. in fact few DMA forex brokers exist if any. I think you mean STP. A DMA broker would not clear the transaction until the trade is completed. This requires additional warranties by the client to meet credit controls.

DMA was primarily invented to prevent the broker from front running your orders. Mostly used by institutions who have a solid edge (or are temporarily deluded into thinking they have a solid edge) and don't want to share it with the brokers. So DMA places the order directly in the market without the broker being aware of the trade until he has to clear it. Very prevalent in strategies that front run the orderbook.

I do not know of any forex brokers that allow clients to bypass credit controls.

I am not sure what DMA may mean for an OTC market at all. IB's Idealpro is an ECN afaik.

Amazing, Australia also did this about a year ago and IB had a huge argument with them before eventually giving up on FX there. Thanks Alex.

Hans Peter - My IB account in Australia simply said one day "Order rejected, Australian clients are no longer allowed to be short a currency."

Well, regulators don't want retail liquidity go into fx or other purely speculative markets. Regulators want retail liquidity go to the stock market to pump it up further and further. To then say one day wow what a surprise that it busted, and we did our best to protect it from those nasty high frequency traders (or "predatory algos", or "forex brokers", or whatever will be popular by that time).

Interesting subject - my take is participants are pushed out of the US market to give room for an upcoming global FX exchange, which could be NASDAQ.

I think the only obvious place for Aussie traders to trade FX with IB would be out of Hong Kong, Europe is too far to go, but nice for a holiday :)