FX comment: Little to Gain, a lot to lose
There has always been some paranoia in retail FX about the possibility of being ripped off by the platforms. Many of these complaints were risible, insisting that price could be deliberately spiked by the platform to take an unfortunate trader out of his tiny position. However, the publication of the complaint against Gain/Forex.com has given further impetus to the paranoia (National Futures Association serves complaint to Gain Capital).
Some of the comments received by theweeklyFiX have even been critical of the NFA itself, touting a bizarre theory that the publication of the report was delayed till after the US House of Representatives passed Dodd/Frank. Yet Dodd/Frank didn’t, and never was going to, cover retail FX.
One particular blog accuses the NFA of incompetence but does go on to quote the CFTC in describing the regulators’ lot: “The Commission has been in a perpetual game of technological catch-up. Put simply, we learn of technological innovation after the fact and are left to consider the impact of trading methodologies, such as high-frequency trading, after it has had a widespread effect on the markets.”
The NFA is quite clear that there must not be any discrimination between clients – from which we would infer that client profiling is not allowed.