Sadly, it comes down to this: Is an incompetent regulator that can miss things for years (even decades) worse than no regulator at all?
The good news is that sometimes the NFA does catch things quickly. Look at what they said about that lawsuit Raimundas is involved in.
https://www.forexpeacearmy.com/fore...-accuses-fxdd-differential-slippage-more.html
Sadly too Pharaoh, the NFA caught
absolutely nothing on its own! If it were not for the poor victims of the vicious violence of FXDD suing their own clients, which resulted in the victims banging down the doors of the NFA,
None of this would have seen the light of day even today!
If it were not for this firm's own supreme arrogance resulting in this uproar, the broker would still be quietly ripping the ass out of me and you, forever (yes, I hold a small account at FXDD for testing purposes)!
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Again, I propice that by force of regulation:
A - We require all regulated entities to segregate each and every customer's funds in an individually held, non-aggregated account; and require these accounts be made openly transparent to their individual owners electronically, for continuous inspection from within the custodial bank's records; as a common sense cross-check on the broker's records.
B - We require the custodial banks harboring these "free funds on deposit" be held "fidicarily responsible" as the first-line overseer and guarantor of their fiduciary client firms' "Accounts in Aggregate".
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These are very simple, very accurate, very cost efficient, timely, powerful, and easily implemented modifications to the current rules.
The Statistical Deviation of the growth or shrinkage of the aggregate account balance of any given firm from that of the larger community is always extremely revelatory of a deviant firm's behavior, and are a very reliable tool for immediate detection of aberrant behavior at any client firm, small or large.
Daily, flags would be easily spottable, reviewable, filtered and cross-reported to the client firm's senior mangement, and to the Regulator. Firm mangements are today already held to fairly high standards theoretically, but once placed on notice in this way, would know that indisputable evidence was being recorded in realtime for use in future actions. No one could escape this auto-net within the regulated environement.
I suggest that in the current fllght to regulatory quality this enviromental change would also tend to reverse the flight, encourage the retention of, and attract new business; currently fleeing the complex of US Regulation, as worthless overhead.
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I cannot over-emphasize my opinion that this is THE ONE & ONLY Method for making this industry radically safer, for all, right down to the "Individual Customer Account" level.
I challenge anyone from within the industry or not, to contradict my position and live to tell about it.
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Also recognize: One can only build a solid regulatory structure by incentivizing good behavior from the bottom-up, not by primarily punishing wrong-doers from the top-down.
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1 - The funding of the regulator must be completely independent from its actions. This is absolutely essential to prevent the obvious conflicts of interest.
2 - The funding of the regulator must be completely guaranteed by Congress
In Retrograde, to "Adequately and Substantially" fund the hire and retention of all necessary, seasoned, commited, and career-minded industry professionals (so desperately needed); rather than starving the regulatory departments, setting up their leaders indirectly for failure by fiscal means, forcing the hire of Motor Vehicle Department class drop-outs and newbie college grads who majored in Fine Arts with a minor in Law, which are now the typical class of candidate available to them who might be willing to accept their meager offerings.
3 - Up
Heavily! the Annual Registration fee for a fiduciary firm's registration, then credit back 95% of the fee for passing a stringent mandatory annual audit.
This would not only help keep out the riff-raff in the first place, but also continuosly reward impeccable corporate behavior.
4 - Assign fines imposed and collected from any errant firm to a ""Regulated Firm Investor Compensation Fund", rather than having those revenues accrued to the coffers of the Regulator. This would do much to divert criticism of double-dealing, while building a very much needed Buffer Fund for compensation over time, on future rainy days such as these.