According to the translation of the release, the license is suspended for 6 months, and may be reinstated pending further actions by the firm.

If a firm wishes to co-mingle customer margin funds for cleared futures and OTC products, it can do so with special permission from the CFTC. Without receiving the special order from the agency, some cleared contracts may not receive the same degree of protection in the event of a bankruptcy.

From the NFA:
January 22, Chicago

The investigation was prompted by a complaint from a customer in Russia, who described herself as a shareholder of DIP and was concerned about her investment because of her inability to communicate with Glytenko. This individual also indicated that Glytenko operated several pools which were not listed with NFA. As of May 2009, the firm had indicated to NFA that it was not currently doing futures business, but NFA's investigation of the DIP's websites suggests otherwise. Effective immediately, Glytenko, DIP and ICM are prohibited from soliciting or accepting any funds and disbursing or transferring funds of customers, pool participants or investors in any pools or accounts which Glytenko and the firms exercise control over or operate. Additionally, Glytenko, DIP and ICM are prohibited from placing trades on behalf of any pools or accounts that they exercise control over or operate. The MRA will remain in effect until Glytenko, DIP and ICM have demonstrated that they are in complete compliance with all NFA Requirements. Glytenko, DIP and ICM may request a prompt hearing before NFA's Hearing Committee.

It is quite easy to find reputable offshore Forex brokers these days. It seems that regulators are simply trying to kill small domestic ones. I would like to know what good they believe will come of this new batch of restrictions.

BUDAPEST, Oct 7 (Reuters) - A Hungarian central bank plan to curb foreign currency lending is misguided and could deepen the recession while giving more powers to the bank to restrict financial firms may be dangerous, the country's top banker said.

Hungary's banks are doing much better than the central bank had expected and the non-performing loan rate of banks will peak at significantly lower levels that the national bank estimates, said Tamas Erdei, the newly elected chairman of the country's banking association.

"I can accept to a certain degree that for the sake of financial stability, we need some sort of regulatory framework, but (proposed forex lending curbs) would deepen the recession, hamper construction and the real estate sectors and slow the country's exit from economic troubles," Erdei told Reuters in his first interview after election.

Erdei's comments came just days after central bank Governor Anrdas Simor announced a proposal to limit foreign currency lending as they posed a risk to financial stability and increased the country's vulnerability. [ID:nL4563368]

Hungary's economy is expected to shrink by 6.7 percent this year and 0.9 percent in 2010.

Erdei said limits on loan-to-value rates are acceptable but should be set at 80 percent for forint loans and 70 or 80 percent for loans in euro, well above Simor's proposals.

"I believe that for loans of 15 to 30 years, we should consider the euro a domestic currency and the loan-to-value rate should be the same as the forint's, although I could accept an adjustment period," Erdei said.

But he said that proposals to set loan-to-income limits are not the central bank's job and such prudential issues should be handled by the regulator PSZAF, which should consider a variety of factors, including collateral levels, and not just income.

"With such a rule, we would essentially bar a very large segment of the population, those with the average income, from getting a bank loan," Erdei said.

TOO MUCH POWER

Erdei said that a separate proposal which would give the central bank temporary powers to limit financial institutions or products would give too much power to the bank.

"I consider it very dangerous to give the central bank a right to take extraordinary measures, like suspend products or players for 120 days ... if they threaten financial stability," Erdei said.

"This is subjective and I don't think it's safe, Erdei said. "If we do this, we need guarantees."

Erdei said such power should lie with the six member financial supervisory council envisaged by the legislative changes planned by the government.

But unlike in the original proposal where the central bank, the finance ministry and the regulator get two seats in the council, they should be given one each and the rest should be given to the Banking Association, the Budapest Stock Exchange and Hungarian Chamber of Commerce.

Hungary had to resort to a $25.1 billion financial package from the IMF, EU and World Bank last year and must improve its supervisory authority's independence and strengthen its institutional framework for financial regulation to meet the requirements of its programme agreed with the IMF.

For details of the proposed regulatory changes outlined by the IMF, please click on [ID:nL2626904]

Erdei also said the central bank is overly pessimistic about the prospects of the bank sector and if the current trend continues, the non performing loan rate of banks will peak between 5 and 7 percent, well below the central bank's 13-15 percent projection. [ID:nLS60492]

"Under a stress scenario, this would be 6 to 8 percent," Erdei said. "I personally don't share the (central bank's) very pessimistic forecasts," Erdei said.

Under a base case, lending losses could equal around 3 to 4 percent and risk provisions set aside already cover most of these, Erdei said. (Editing by Toby Chopra)

Did funds solicited in the US end up with the Jamaican company as well?

According to Mother Jones, Scott O’Malia worked as the director of federal legislative affairs for the energy company Mirant, which has been cited for numerous abuses and pushed vigorously for deregulation ahead for the California energy crisis.

The NFA's arbitration claims are up 40% this year, hence the need to reduce costs.

In May 2009 the Alberta Securities Commission alleged that "in breach of Alberta securities laws and contrary to the public interest, Global Trading Center, Harris Shapiro and Kaye Simone Webster White engaged in illegal advising and selling of securities in Alberta to Alberta residents."

Capital Blu's LLC is a Florida company, but its General Partner, Donovan Davis Jr, has a history of activity in Jamaica. The Jamaica Observer reports:

[Donovan Davis Jr] - "Now there have been a lot of things written in the newspapers, and I would like this opportunity to clarify prevailing misconceptions. Capital Blu Limited, which is an incorporated Jamaican company, is the entity that is going to apply to the FSC for the solicitation of funds in Jamaica.

"Capital Blu Management LLC is the trader that manages accounts in the United States and has clients throughout the world that open accounts under their own names through brokers. This is not unusual and is done by the world's most reputable financial institutions. Capital Blu Limited has not received a single cheque for investment purpose from anyone in Jamaica and that is a fact."