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It is obvious that a substantial number of international Forex brokers due not accept US traders. A good number of international Forex brokers operating offshore do not accept US residents to open account with them. A good number of these brokers are the regulated ones. It will become very clear as we explain why this happens. Doing business with US citizens in this case is barred by strict regulations. Mostly, these are regulations imposed by US government. However, this does not completely bar US citizens from opening account with international brokers. There are several offshore international Forex brokers who still accept US traders. Discussed below is the major reason why US citizens cannot open account with some international Forex brokers. Dodd-Frank Act The Dodd-Frank Act is the recent federal statute signed by president Obama. The first time it become operational was on July 21, 2010. It is a reform agenda which is purely developed to regulate financial market. The act brought forth new rules that are designed to regulate all financial markets including stocks, futures, futures, options and Forex. Dodd-Frank Act states that for every Forex Brokerage Company that wants to offer trading service to US citizens must be registered with the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA). This might prove very difficult to many offshore international Forex brokers. Obviously, as at to date there are a good number of Forex brokerage companies are not registered with neither of the regulatory body. This number is constituted by legal and regulated brokers. Such brokers simply stop accepting US citizens so as to avoid the paper mess. Rather than incur the unforeseen expenses, it is easier and wiser for them to decline US citizens. The primary reason that has forced international offshore Forex brokers to decline US citizens is the implementation of Dodd-Frank Act. US government has also provided a number of reforms and changes targeting the financial markets that bar their citizens from doing business with international brokerage companies. Most of these regulations are linked to the CFTC activities. Some of these regulations have been directly implemented by the US government. There are many other disadvantages of Dodd-Frank Act. As a result of this regulation, most foreign banks have also stopped accepting US clients. Secondly, offshore international Forex brokers have made several changes such as minimum account trading, spread levels, leverage, and for US citizens. The Way Out Despite the restrictions imposed by the Dodd-Frank Act, some offshore international Forex brokers still accept us citizens. If you are a US citizen, there are chances you can open account with such international brokers not registered by US regulatory bodies - NFA and CFTC. This is only possible under certain conditions. Non-US Forex brokers can only accept us customers to open account but only under their affiliate branches in US. Conclusion The regulation of offshore Forex brokerage companies requiring them to be registered with the Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) before accepting us citizens has both its advantages and disadvantages. The primary advantage is that the regulation ensures the safety of us residents’ funds. This is the intention of the regulation. It is also expected to enrich the US State Treasury since the funds invested won’t be taken out of the USA borders. Unfortunately, there are substantial disadvantage of this both to us citizens and government. First, the US citizens are significantly barred from using services provided by Forex brokers not regulated by US government. Secondly, the brokers who currently accept us citizens have substantially raised their minimum capital requirement. The regulation has also resulted in unfavourable trading conditions for US citizens; reduced leverage and low spreads. If you need offshore brokers that accept US citizen, here's my recommendation: RoboForex details. They provide 1:500 leverage; something you won't find in NFA governed brokerage. If being not regulated is fine for you, I would suggest you look into another look at FXOpen; it's a decent broker with fairly high leverage and ECN account option with true DOM display.
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