Trading in foreign currency exchange futures, a commodity, is not
illegal for U.S. citizens. It is, however, a regulated market, like
other commodities markets. In order to trade in commodities futures,
including foreign currencies futures, the broker must be registered in
the United States with the National Futures Association. The reason
that GCI Financial cannot trade in the U.S. is that it is not so
registered. There are registered currency futures brokers that can do
business with GCI indirectly, but a resident of the U.S. must trade
with the registered broker.
Registered brokers can be located through the National Futures
Association. That GCI is not registered can be verified by using the
search functions here:
National Futures Association
http://www.nfa.futures.org/basicnet/Search.aspx
The United States Commodity Futures Trading Commission (CFTC) is
charged with regulated futures trading. It has issued a number of
warnings and advisories regarding foreign currency futures trading
frauds.
The United States Commodity Futures Trading Commission (CFTC)
COMMISSION ADVISORY
BEWARE OF FOREIGN CURRENCY TRADING FRAUDS
http://www.cftc.gov/opa/enf98/opaforexa15.htm
"A new federal law, the Commodity Futures Modernization Act of 2000,
makes clear that the CFTC has the jurisdiction and authority to
investigate and take legal action to close down a wide assortment of
unregulated firms offering or selling foreign currency futures and
options contracts to the general public. In addition, the CFTC has
jurisdiction to investigate and prosecute foreign currency fraud
occurring in its registered firms and their affiliates.
[...]
"Generally speaking, foreign currency futures and options contracts
may be traded legally on an exchange or board of trade that has been
approved by the CFTC.
Even where currency trading does *not* occur on a Commission-approved
exchange or board of trade, the trading can be conducted legally
where, generally speaking, one or both parties to the trading is (or
is a regulated affiliate of) a bank, insurance company, registered
securities broker-dealer, futures commission merchant or other
financial institution, or is an individual or entity with a high net
worth.
Where forex firms do not fall into the categories of regulated
entities outlined above and engage in foreign currency futures and
options transactions with or for retail customers who do not have high
net worths, the CFTC has jurisdiction over those firms and their
transactions.
[...]
"Contact the National Futures Association to see whether the company
is registered with the CFTC or is a members of the National Futures
Association (NFA)?. You can do this easily by calling the NFA
(800-621-3570 or 800-676-4NFA) or by checking the NFA's registration
and membership information on its website at
<http://www.nfa.futures.org/basicnet/>
[...]
"The Commodity Futures Modernization Act is available in our Law and
Regulation <http://www.cftc.gov/cftc/cftclawreg.htm>"
COMMODITY FUTURES TRADING COMMISSION (CFTC)
ADVISORY ON FOREIGN CURRENCY
http://www.cftc.gov/opa/press01/opaadv06-01.htm
"The Commodity Exchange Act (the Act) was recently amended to make
clear that it is unlawful to offer foreign currency futures and option
contracts to retail customers unless the offeror is a regulated
financial entity as enumerated in the Act, including futures
commission merchants (FCM) and their affiliates. Off-exchange trading
of foreign currency futures or options with retail customers by
counterparties that are not within one of the enumerated categories is
a violation of Section 4(a) of the Act."
SEARCH TERMS
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