Forex Forums | ForexLasers.com


Go Back   Forex Lasers Forum > FOREX TRADING > Forex Discussion


Over Regulation

Forex Discussion


Reply
 
LinkBack Thread Tools Search this Thread
  #1  
Old 20-12-2010, 19:46
Level 1 Lasers Member
 
Join Date: Dec 2010
Posts: 2
Default Over Regulation

Let’s take the example of the United States Retail Foreign Exchange Dealer (RFED) regulated by the NFA and CFTC they have a minimum regulatory capital requirement of $20,000,000.00 now this money is relatively safe and still belongs to the RFED so its cost is the value of money over time, inflation is typically 3% per year so I will use that figure as the annual loss of the regulatory capital however it would be very easy to argue that the real cost is 6% or more.

$600,000.00 Cost of regulatory capital
$350,000.00 Chief Compliance officer
$200,000.00 Compliance person to review promotional materials
$150,000.00 Compliance person to enforce policies procedures and liaise with regulators
$300,000.00 outside legal counsel
$150,000.00 Auditors
$75,000.00 Third party verification software (TPV)
$125,000.00 Full time tech person to implement the TPV and required regulatory reports
$50,000.00 Annual review of Bank Secrecy Act, AML, PATRIOT Act and other required programs

That’s an extremely conservative $2,000,000.00 per year, before fees, cost burden imposed by over regulation, and the really crazy thing is not one of the costs above actually produce any value they are simply a drain on productivity, a drain on the FX market and a drain on society as a whole.

Regulation should be imposed by educating the investors/public at large not by usurping value from enlightened and driven individuals.
Reply With Quote
  #2  
Old 27-12-2010, 17:47
Moderator
 
Join Date: Aug 2009
Posts: 26
Default

350k chief compliance officer?
__________________
Michael
Forex Magnates - Home of the Forex Elite
Reply With Quote
  #3  
Old 06-01-2011, 10:54
Level 1 Lasers Member
 
Join Date: Dec 2010
Posts: 13
Default

Quote:
Thatís an extremely conservative $2,000,000.00 per year, before fees, cost burden imposed by over regulation, and the really crazy thing is not one of the costs above actually produce any value they are simply a drain on productivity, a drain on the FX market and a drain on society as a whole.
Interesting calculation. And I don't like it. It actually first time I see any statistic about broker.
Reply With Quote
  #4  
Old 29-01-2011, 03:40
Level 1 Lasers Member
 
Join Date: Dec 2010
Posts: 2
Default

Quote:
Originally Posted by ForexMagnates View Post
350k chief compliance officer?
CCO and other compliance persons are gross annual salary + 1/3 to cover the costs of additional real estate, travel expense, employment tax, computers, phones and office supplies.
Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are Off
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
Regulation proposals ForexMagnates Forex Discussion 1 13-08-2009 14:12


All times are GMT. The time now is 01:06.


Powered by vBulletin® Version 3.8.10
Copyright ©2000 - 2019, vBulletin Solutions, Inc.