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Originally Posted by dennerle  for those who worried that FSA will follow USA's CFTC or NFA ruling, it would be glad to know that it is unlikely
For more information you can visit FSA webite http://www.fsa.gov.uk/ and refer to the FSA's aims and objectives:
The FSA has set out its aims under three broad headings: - promoting efficient orderly and fair markets;
- helping retail consumers achieve a fair deal; and
- improving our business capability and effectiveness
Over here, you can refer more in-depth on these details and highly FSA will not follow what CFTC or NFA are doing...
Do let us know your views about FSA whether they will follow NFA /CFTC footsteps for discussion too  |
Hi dennerle,
We find it unlikely that the FSA will adopt the same leverage reduction being proposed by the CFTC.
The CFTC has a rules based system setup and the rules are one size fits all. If you meet requirements on the checklist you can open a forex brokerage. $20 million in minimum capital, check! customer identification program, check! etc. The FSA operates differently in terms of how they create their rules. They take a closer look at each broker not only at the minimum amount of capital the company has but at the amount of capital they have even exceeding the basic amounts. They also look at the experience of management in the financial industry, how long the company has been operating, how long the systems have been running and reliability, etc. all in order to gauge what a broker is allowed to do or even if they will license the broker. Someone off the street without any previous experience in the financial industry could open a forex brokerage if they met the US guidelines; whereas, it would raise red flags with the FSA even if they had the capital requirement. So the mindset is much different in terms of their regulatory approach in what they allow each firm to do.
Hope that helps,
Jason