To clarify the NFA Fine issued on August 30, 2006:
This fine refers to our exemption from the NFA Financial Requirements Section 12(a). This exemption allows us to offer leverage above 100:1 but also requires that our Net Capital is increased in direct proportion. To become an FCM the Net Capital requirement is $250,000 or 1% of the notional value of all open orders. We filed an exemption to offer 200:1 leverage so our Net Capital requirement is 2% of the notional value of all open orders.
During the time frame in question the value of all open orders was approximately $90,000,000 - $120,000,000 which translates to $1,800,000 - $2,400,000 in Net Capital. As part of our last NFA audit we reclassified an outstanding receivable from a current asset to a long term asset. Long term assets are no longer accounted for in the calculation of the company’s Net Capital (Net Capital = Net Current Assets – All Liabilities). As a result on March 10, March 13, and March 31 we fell slightly under the Net Capital requirements as defined by our Exemption for allowing increased leverage. This was a retrospective accounting adjustment and not reflective of our past or present financial standing. As of the end of June 2006 our Net Capital was $4,500,000 and at the end of August 2006 it was approximately $5,600,000. As of May 31, 2006 we were one of the largest Forex FCMs registered with the NFA if measured by Net Capital.
We pride ourselves on maintaining our reputation as being open and honest and are obviously disappointed to have a fine on our record.
InterbankFX
Quelle: InterbankFX Forum
