FAQ
Is MF Global FX affected by the National Futures Association (NFA) decision to ban hedging and impose FIFO on closing trades?
NFA Compliance Rule 2-43(b) that governs “Offsetting Transactions” does not apply to MF Global FX. The NFA is a U.S. self-regulatory organization that regulates Forex Dealer Members(FDMs) registered with the Commodity Futures Trading Commission(CFTC).
MF Global FX is the online foreign currency trading division of MF Global Canada Co.(MFGC), an investment dealer and futures commission merchant regulated by the Investment Industry Regulatory Organization of Canada(IIROC). Hedging continues to be available on the MF Global FX Trading Station II platform and open trades can be selectively closed.
Why are MF Global FX margins different from requirements of U.S. forex brokers?
As a regulated member of the industry, MF Global FX margins the unhedged foreign exchange positions of its clients according to IIROC Regulation 100.2 (d)(iv). At MF Global FX, margin rates are derived from rates published by IIROC in the Margin Violation Summary Report.
U.S. forex brokers, or FDMs, are regulated by the NFA and their margin requirements are subject to NFA rules.1
Are the funds in my MF Global FX Trading Account protected? Where are the funds held?
MF Global FX is the online currency trading division of MF Global Canada Co., an IIROC dealer member. Eligible client accounts held by IIROC members are insured against dealer insolvency, within specified limits, by the Canadian Investor Protection Fund(CIPF). For the specific conditions governing client eligibility, determination of covered losses and the limits of coverage, please visit www.cipf.ca.
Client funds in US$ and C$ are held in Canadian bank accounts in the name of MF Global Canada Co.
What is Client ID Verification?
In situations where a client’s ID has not been verified in person, the Financial Transactions and Reporting Analysis Centre (FINTRAC) requires MF Global FX to perform Client ID Verification using a combination of two of the following methods. Please note that items 1 and 2 cannot be used together.:
1. Submit a cheque for at least $1.00 from the client’s deposit account at a Canadian financial institution. The cheque will be cashed and must clear. Cheques for $1.00 will not be reimbursed.
2. Submit a funding deposit via bank draft or wire transfer drawn from the client’s deposit account at a Canadian financial institution. The draft must be accompanied by a bank letter confirming the source of the funds and the wire transfer must also identify the source of the funds.
3. The client’s identification will be verified through an existing Identification Product Method such as Equifax elDverifier.
4. Submit a legible photocopy of one of the documents used for in-person identification with an attestation afixed from a Commissioner of Oaths in Canada, or a Guarantor. This must include the name, profession and address of Commissioner or Guarantor, their signature, and type of identification document.
What is the minimum deposit to open an MF Global FX Trading Account?
The minimum deposit to open an MF Global FX Trading Account is:
US$25,000 or C$25,000 for a 100K or Standard account
US$2,500 or C$2,500 for a 10K or Mini account
US$1,000 or C$1,000 for a 1K or Micro account
To help determine the level of funding in an MF Global FX Trading Account, clients should also factor in the following, among other considerations:
1. Currency pairs most frequently traded and their margin rates,
2. Contract sizes of currency pairs traded in the account,
3. Desired ratio between used and usable maintenance margin in the account,
4. Risk tolerance including maximum leverage and exposure to risk in particular currencies,
5. Risk limits on individual trades,
6. Implied and historical volatilities as guide to potential drawdown based on the leveraged exposure.
To view margin requirements and examples of currency pairs under MF Global FX margin regulation in a US$ account, click here. For the margin requirements in a C$ account, click here.
How do I fund my MF Global FX Trading Account?
Funds can be deposited to your MF Global FX Trading Account by any one of the following methods:
For more details click here.1. Wire transfer,
2. Personal or certified cheques (personal cheques will be cleared and funds held for 10 business days before being credited to your trading account),
3. Bill payment if you bank with RBC, Scotiabank, NBC or Desjardins (this method is only for Canadian Dollars),
4. Bank draft or money order (must be accompanied by the Bank Draft or Money Order Verification Letter) completed by the issuing bank.
How do I withdraw funds from my MF Global FX Trading Account?
To withdraw funds from your MF Global FX Trading Account, please complete the Withdrawal Request form.
Funds can be withdrawn by wire transfer or by cheque. Withdrawal by wire transfer will incur a wire fee of US$25 or C$25. There are no fees for cheque withdrawals. Withdrawals by cheque is available for amounts under US$10,000 or C$10,000.
1Forex Transactions – A Regulatory Guide, page 22, Security Deposits
