Now that we know federal regulators (CFTC) have no ability to protect traders from grand larceny, we traders need to do our our own due diligence. I am done doing business with any FCM other than the largest ones. I will only do business in the future with an FCM that has excess capital far greater than the amount of client funds they handle. [Of course, as we all know by now FCMs can report any number they want -- whether the report is real is another matter.]
I am done doing business with any FCM that has a history of unusual regulatory problems.
The following PDF file shows the following data for FCMs with more than $1 billion of segregated futures market customer assets:
- Excess capital above margin commitment
- Excess capital as a percent of segregated account funding
- Regulatory actions – by the NFA, CFTC and exchanges
- CFTC reparation cases
The FCMs in bold represent those firms I will consider trading with in the future.
By the way, the age of cheap commissions will soon be a thing of the past if the CFTC and Congress respond to the MF Global and PFG scams the way they should. Whereas I have paid an average round-turn commission rate of $4 (inclusive of all expenses and fees), I fully expect to pay something north of $8 in the future.
The FCMs I will consider include:
- Goldman Sachs
- UBS
- Merrill Lynch
- Morgan Stanley
- Barclay Capital
- Credit Suisse
- RBS
Not that I will be accepted as a client of all these firms. Several of the larger FCMs have an annual minimum commission expectations in excess of $250,000 to $500,000. I cannot hit these minimums.
But, I will not go through another PFG again.