Hello and thank you for your question.
I have looked into Oanda's record quite thoroughly. There is a
potential for concern, because if Oanda went bankrupt your margin
account could disappear. However I find no indications that OANDA
might be in any danger.
OANDA is the creation of Richard Olsen (OANDA's Chairman) and Olsen
Capital.
"Olsen is a hedge fund manager and leading provider of e-finance
technology and services, including high-frequency market data,
advanced forecasting models and integrated risk management and
investment decision support tools. The group has also launched the
investment industry's first online currency trading platform for micro
transactions."
http://www.olsen.ch/about/
"One of the more unusual foreign exchange prediction research and
analytics available comes from Olsen Group, a Swiss organization that
has compiled almost 20 years of foreign exchange data. It has then
cleaned and interpreted the data to produce a set of forecasting tools
and research that it claims will invariably give an edge to FX
trading. It has even produced an Internet trading platform, oanda.com,
that has automated the findings.
So confident is he in its findings that on top of its trading
platform, its founder Richard Olsen, an economist, has taken the
unusual step of using his analytics to set up his own hedge fund."
http://globalf.vwh.net/content/?article_id=392
There is also an Olsen FAQ, although this is more pertinent to people
who allow Olsen to mangage their OANDA account.
http://invest.olsen.ch/docs/faq.php
OANDA is a member of the National Futures Association (NFA), and it
has a perfect record with them (that is, no regulatory actions, no NFA
arbitration awards, and no CFTC regulations cases).
http://www.nfa.futures.org/basicnet/Details.aspx?entityid=0325821
If OANDA did face insolvency or other exposure, your concerns would be
legitimate:
"Your margin account with OANDA is not insured under any state or
federal insurance program, or by any other entity. In the event OANDA
should become insolvent or file for protection under the bankruptcy
laws, it is possible you would lose the entire amount in your Margin
Account."
OANDA Corporation Risk Disclosure Statement
http://fxtrade.oanda.com/fxtrade/doc/risk_disclosure.pdf
Although OANDA services over 14,000 clients, it has only 20 employees!
http://www.destinationcrm.com/directory/company.asp?CompanyID=2716
Just this month, NFA issued an Investor Alert that you should read in
its entirety, even though it makes no specific reference to OANDA.
NATIONAL FUTURES ASSOCIATION
INVESTOR ALERT - AUGUST 2003
UNDERSTANDING THE RISKS OF TRADING IN THE
RETAIL OFF-EXCHANGE FOREIGN CURRENCY MARKET
http://www.nfa.futures.org/compliance/forexInvestorAlert.asp
As to OANDA itself:
"The Company, a Delaware corporation, was established in 1996 and
is headquartered in New York City with offices in Zurich and Toronto.
OANDA is a registered Futures Commission Merchant (FCM) with the
Commodity Futures Trading Commission (CFTC) and is a member of the
National Futures Association (NFA ID #0325821).
OANDA was co-founded by Dr. Michael Stumm, a professor of Computer
Engineering at the University of Toronto, and Dr. Richard Olsen of The
Olsen Ltd., a leading econometric research and development firm whose
world-renowned products have been in use at over 70 major
institutions."
http://fxtrade.oanda.com/about/
The principal executives of Oanda are
Dr. Richard Olsen, Chairman and Co-Founder
Dr. Michael Stumm, Chief Technology Officer and Co-Founder
Alan Fletcher, Head of FX Operations
Biographical information about them appears at:
http://www.oanda.com/site/oanda/com_mgmt.shtml
"OANDA is a registered Futures Commission Merchant (FCM) with the
Commodity Futures Trading Commission (CFTC) and is a member of the
National Futures Association (NFA).
OANDA's NFA number is 0325821"
http://fxtrade.oanda.com/about/about_fxtrade.shtml
Search terms used:
OANDA NFA
Oanda complaint
Oanda solvency
"richard olsen" oanda
Thanks again for letting us check this for you. If you find any of
the above unclear, please request clarification. I would appreciate
it if you would hold off on rating my answer until I have a chance to
reply.
Sincerely,
Google Answers Researcher
Richard-ga |
Request for Answer Clarification by
ukworker-ga
on
02 Sep 2003 12:52 PDT
... or any other regulatory bodies.
Also, is there any source for their financial wellbeing/profitability
(this may be difficult, given that they are a private company, but
there may be some articles or other sources).
Finally, anything on the parent company (Olsen and Associates), and
whether Oanda may be affected by activities in the parent or any other
subsidiaries.
Thanks again
|
Clarification of Answer by
richard-ga
on
02 Sep 2003 15:21 PDT
Hello again:
I have received my MSN OANDA group membership.
Here's a question that was posted to the group on March 13, 2003:
-----------
"Is there any suspicion or proof that OANDA is in anyway fraudulent or
facing financial troubles that could lead to bankruptcy?
Have any of you received the profits that you have incurred while
trading with OANDA.com by withdrawing all your money from their
accounts? Or have you always kept your money in their accounts thus
not actually knowing if you will receive your initial deposit plus
realized profits/losses?
Would others please state the largest amount of money that they
deposited in and then withdrew from your OANDA.com accounts?
Why does OANDA.com not state the specific major United States
financial institution that they process our accounts through?
It seems to me that the profits and losses that you can incur while
trading with OANDA.com is huge compared to trading elsewhere. Are
these profits and losses accurate or specific to trading with
OANDA.com?
What position does OANDA.com, Olsen Group and their FXTrade Platform
hold with Commodity Futures Trading Commission (CFTC) and do they
abide by the rules of the Commodity Futures Modernization Act of 2000
(CFMA)?
Is OANDA.com or the Olsen Group a registered futures commission
merchant (FCM) are they registered as an associated person (AP) are
they registered as an introducing broker (IB) are they a commodity
trading advisor (CTA) are they a commodity pool operator (CPO) or are
they registered at all? If so where can I find this information on
their website or what is the address or telephone number of their
legal offices where one can request such information?
Are OANDA.com and the Olsen Group's head offices located in the United
States or elsewhere? And if elsewhere would they be subject to the
same laws, rules and regulations as if they were operating from the
United States of America?
Any further information that would deter or attract a novice or
professional would be greatly appreciated.
My questions are proposed in order to protect mine and others
investments and they are in no way intended to deter customers from
the OANDA.com and Olsen Group trading platform."
-----------
Since the MSN Forum is a closed group, I do not feel it appropriate to
quote the answers at length. But all replies were supportive of
Oanda. The Board Moderator gave a lengthy reply; apparently the
Moderator is affiliated with Oanda. Here are some excerpts:
________________________________
"The issue of safety of funds is indeed very important, and we
certainly understand why any prospective customer would want to
investigate this issue.
....
I can assure you that if anyone ever had any problems withdrawing
funds from an OANDA FXTrade account, then you would find a post about
it here. OANDA does indeed abide by the rules of the Commodity Futures
Modernization Act of 2000, and is registered as an FCM with the CFTC.
Our NFA number is 0325821. This implies that we must submit financial
information on a weekly basis, just like the other FCM's. I'm not sure
why you ask whether we are registered as an IB, since we are not one.
Similarly, OANDA has never given any advice, and hence need not be
registered as a CTA, and OANDA is certainly not a CPO. As for your
question as to which financial institutions we process funds through,
some of these institutions become visible when you do business with
us. However, we do have NDA's in place with a number of financial
institutions we do business with, and hence, unfortunately cannot
disclose them. But, I can assure you that we only use internationally
very well known and reputable financial institutions.
....
I am not quite sure why you ask about Olsen Group. OANDA is an
independent company incorporated in Delaware, and OANDA and Olsen
Group operate entirely at arms length.
....
I'd like to point out that OANDA's leverage is more inline with what
major banks offer and significantly lower than what other Internet
trading firms offer. Also, our spreads tend to be lower than that of
other FX trading system. As for accuracy of profits and losses, I
assume you are asking whether our bookkeeping is accurate? I can
assure you it is....
____________________
[Me again...]
I hope this helps addressyour concerns. Meanwhile I will keep looking
and if I find anything further I will add another clarification.
Sincerely,
Richard-ga
|
