It is with the kind permission of the board administrators that we are allowed to post this. Thank you.

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We are a group of autotraders that started our own brand new brokerage that just launched. Our technology was just recently completed. We use Metatrader4, with custom direct-connections to the liquidity providers. So it's not your typical MT4.

It is important to note that we are NOT a large commercial brokerage. We started it for ourselves. Therefore the brokerage is NOT our primary business, trading is.

The format is for us autotraders, we have a direct line to the liquidity providers so our spreads are like ECNs (1/2 pips on EURUSD average spread during normal hours). We don't charge commissions or widen the spreads or alter the prices in any way. Only a monthly fee to help us cover costs.

Our goal is to have other traders join us to increase volume. When we hit our next volume tier, we get another price break on the spread, which means even narrower spreads.

The NUMBER ONE difference between us and other brokers is that we are NEVER EVER a counterparty to your trades, EVER! We go to great lengths to insure that. We don't want any part of your trades, so we NEVER EVER have the other side. Seriously.

We have support for live traders, but do not have support for educating traders.

We have a minimum deposit of $100, not to attract beginning traders, but to let traders try us out with minimum risk.

We've been there. We understand that there are no words, and no purpose to try to tell you to "trust" us, and that you have to prove it to yourself. So $100 will allow you to trade, and see the execution, spreads and fills, etc. in live trades yourself.

We don't have any trading-desk or engage in any hanky-panky. We aren't counterparty, so we can't profit from your losses.

The bottom line is that we are all traders here. All of us, including you, trade on the exact same spreads, same quotes, same prices, same order execution, same everything.

It's a collective afterall.

Trader 4of7 @ TheCollectiveFX.com

Who is your regulating body? Where are you based?

AngelSpike,

I hope you don't mind but I've copied a pasted straight from our FAQ, I think this should answer your questions.

If you have any further question the we really are grateful for them as it allows us to compile additional questions for our FAQ as and when they arise.

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Where are you based?

The Collective FX LLC is a Delaware Limited Liability Company, whose principal office is based out of Cape Coral, Florida, United States.

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If I have questions how do I contact you?

You can contact us using the following:

Phone: +1 941-306-1721
Fax: +1 239-236-1469
Email: 4of7@TheCollectiveFX.com
Skype: TheCollectiveFX_Accounts

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Are you regulated, and if so by whom and where?

We've actually gone to great legal lengths to make sure everything is forthright. The US regulations mandate that any firm that is counterparty to client trades be registered.

This was done to protect clients, since when the broker is counterparty to the clients trades, if the client wins, the broker has to pay. They want to make sure the broker can pay the client.

We ourselves are traders, and had no intention of being involved with our clients trades. We just want to trade ourselves. So our Brokerage has been designed with multiple SEC aware law firms in the US, to make sure it is completely legal.

We are never, ever, ever, not even for an instant or a moment, never ever a counterparty to anyone's trades. Don't want to be, don't need to be, and make sure we never are. All trades are executed AT the counterparty, in the absolute purest sense of the word. We don't profit from getting in the middle of trader's trades.

The bottom line is that we are truly more a COLLECTIVE than a BROKERAGE. After a great deal of study of the laws involved, we weren't actually going to say it out loud, but the truth is that registering as a FCM is the legal license to profit from a trader's losses.

WE DON'T WANT THAT LICENSE. So we abstain. No counterparty for us. And in fact, now we are legally barred from taking the other side of our members' trades.

We feel we are truly unique, and there isn't anyone else like us. The reason is that THEY have to be commercial. They have to make their money by widening the spread, trading against you and hoping you lose, running stops, etc, etc, etc.

We can't do any of those things, we aren't allowed to. If we did, then the SEC would shut us down.

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So you aren't regulated, so are my funds safe?

We don't hold your trading funds. Your funds are held by a FULLY regulated Liquidity Provider. They are are all top tier providers such as UBS, Deutche Bank, Saxo, Hot Spot, FXCM, Currenex, Barclays, BOA, etc., so rest assured they are as good as it gets. You trade 'through' us to them where your funds reside.

So my funds are held by a regulated Liquidity Provider, but you just implied that that gives them the right to 'play' with my trades. How does that help?
You are right. The difference though is that our relationships with the Liquidity Providers are not at the Retail level. We deal with them at the Institutional level. These providers don't tend to take on retail clients, and if they do then the retail accounts are managed completely differently. It's a sad fact but the more volume and cash that you control the better and more reliable terms that you can negotiate. Hence the whole thinking behind The Collective FX.


4of7

Hi 4of7, that's an interesting to see such a new broker.

that's no full correct as NFA may check and fine each FCM for many things including business practices, advertising, ethics, funds segregation, etc.

well, that's strange and raises if not a red, but an alert flag for me.

imho, having NFA license won't hurt your business but make it much more credible.

hmm, and who is going to check that you are not doing those things if you are not registered?

it seems you are mixing here banks (UBS, BOA, Barclays) and brokers (Currenex, Hot Spot, FXCM) here. are you sure that a broker can have bank accounts without being a bank and having a bank lincense?

can you disclose the name so it will be possible to verify that they have such a relationship with your company?

it is a bit strange to have funds with only one "Liquidity Provider" and not in a bank account. how will other Liquidity Providers have access to funds?

thanks.

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Miksa,

Thanks for your comments. Please let me address them.

The NFA and other regulatory bodies can only address issues with an FCM when the FCM performs out side of its stated terms and conditions. Clearly acting as a Counterparty is fundamental to being an FCM and thus an FCM has the right to be your counterparty, i.e. the other side of your trade. They are legally allowed to peform within their stated terms and conditions. If they state that they can move the price to the moon and back at will and you agree to that in their conditions then that is what they can do.

If they behave improperly, illegally, immorally, or any otherway that is outside of their stated service levels then they can indeed be called to order.

Its sad to say but Brokers play two sorts of games. The first being the ones that their clients legally allow them to. The second beings the ones that might just be a little questionable but no one will find out.

By not having that regulation we are not legally able to act as Counterparty, therefore we can NEVER be on the opposite side of your trade and thereby profiting when you lose.
We don't want that license and we don't need that license. It is indeed a legal right to profit from a customer's loss. This is contrary to the ethos behind our Collective.

Also, regulation requires a spare $20M dollars or so in reserve capital. Which again is only needed to ensure that customers can be paid in the event that the customers profit more than the Broker does and that the Broker has enough capital to pay them.
Offshore regulation can be had for as little as $50K, but what's the point in that?

If our stance above means that we have less members then so be it. We really aren't a conventional Broker. We certainly don't need to sign up 10 or 50 or 100 new members a day just so that we can eat Ultimately this Brokerage serves our own trading needs.

We could play the smoke and mirrors games with offshore regualtion to tick a box or two, but we think that is totally worthless and again in direct contravention to our inability to trade against our members.

No one is going to check up on us. There's nothing to check up on. If any member ever has a grievance then they can complain to which ever regualtory body they choose. If we are ever found to be Counterparty to any of our members' trades then thats illegal, not just contrary to some guidelines, but actually against the law. We are traders, we don't want that risk. We simply aren't able to do the things that most traders are scared that their Brokers will do to them.

The Interbank marketplace is made up of Banks, in the conventional sense that you or I may use every day in our regular lives and also by Brokers who have 'Bank' status in the interbank marketplace. If I have mixed terms then I apologise, but fundamentally any player in the Interbank market place is a 'Bank' in my previous statements.

I'm not exactly sure what you mean when you say "are you sure that a broker can have bank accounts without being a bank and having a bank lincense?" As a Broker we have a bank account, like any business does. We also have accounts at Liquidity Providers. I'm really not sure I understand, sorry.

We won't disclose the name of any of the Liquidity Providers that we are dealing with. This is part of our confidential business model. We did indeed tell a couple of people who enquired only to have the LP's give us a hard time afterwards. Its a sad situation but unfortunately there are people already trying to spoil our party.

One thing that you can quote me on though is that ANY LP that we deal with now or in the future will be fully registered in the US. Our personal trading capital is in the same place that our members trading capital is and thus we'll never use anyone that doesn't fully meet our own personal standards. We'll certainly never ever go to an LP who isn't in the US.

I'm a bit stuck as to how to answer this "it is a bit strange to have funds with only one "Liquidity Provider" and not in a bank account. how will other Liquidity Providers have access to funds? " as again I'm not sure exactly what you mean. But here goes.

Our personal trading funds and our members trading funds are held at the LP in a trading account. We don't have a margined arrangement where we trade on a letter of credit or the like. The funds are actually deposited in FULL at the LP.

As to how the other LP's will access the funds. It will be exactly the same for each and every LP. We'll move from one to another, never using two simultaneously. Therefore EVERYTHING moves from LP1 to LP2 when we move. Therefore only one LP ever needs access to the trading funds at any time.

I've tried my best to address your comments. If I've failed then let me know. Equally if you have any more questions then you are welcome to ask them either here or privately, my email address is below.

It is very useful to us to have these questions, no matter how hard they may be to answer, as it provides useful extra content for our FAQ.

Thanks.

4of7@thecollectivefx.com

4of7 thanks a lot for detailed explanation. i was probably not very clear in some of questions, sorry.

i am a bit confused by your meaning of regulation. you mostly mean it is about being a counterparty and as it is not apply to your company.

but on other side you highlighed that LP are fully registered in US meaning that registration is a good thing, right?

and why other ECN brokers (like Fastbrokers and PFG Best) who are not counterparties but are registered with NFA?

also your pricing advertisement looks misleading (and that's what NFA would look for )

for example, for Tier 2 ($1004/Month, 150 lots round turns) it claimsif my calculation is correct, then savings is just $196 comparing with ECN commissions $4/100 per side:

$4 * 2 * 150 = $1200
$1200 - $1004 = $196

and the same goes for all tiers. it is not clear what happens if a trader traded more than hir tier limit.

and in reality, your monthly maxed pricing can be more expensive than normal ECN commissions.

for example, for slow months tier 2 trader traded 75 lots and paied $600 in commissions but would still have to pay $1,004 full monthly fee

actually, it looks like any trader with 151-250 lots per months would be much better with $4 per side commissions than with your fixed Tier 1 $2,004 monthly fee.

$4 * 2 * 151 = $1,208 ($13.3 per round turn )
$4 * 2 * 250 = $2,000 ($8 per round turn)

i would prefer to pay $5 round turn ($2.5 one side) commission instead of fixed fee. by the way, it is what Broco-Inverstor ECN account charges.

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Miksa,

You are going to keep me busy. Thanks.

Regulation for sure is a good thing when the parties that are regulated have that regulation for the right reasons. If the regulation is simply a means of being counterparty and thus used to trade against clients then thats a bad thing. I certainly wouldn't want a large chunk of my money at a non regulated or overseas LP.

I know that sounds like a contradiction, but if you read some of our FAQ then I think its clearer.

You mention Fastbrokers and PFG not being counterparties but still having NFA registration. Clearly that is each and every Brokers choice. But in these cases then their registration is inherited from their Futures Brokerages, where regulation is mandatory. I can't comment of FastBrokers but I know that PFG are a very good firm, having traded there myself.

You mentioned them in the context of being ECN's. Their other paltforms may well be true ECN but their MT4 platforms aren't. MT4 doesn't support ECN, we should say that their MT4 offerings are ECN style, they are actually Stratight Through Processors (STP). A good example of a real ECN is EFX(MBT). Again, I've traded there and find their service very good, offering all of the features that an ECN should, such as market depth.


Your pricing comments have even confused me

Very simply. The 'Tiers' are based on the 'honor system', the trader chooses his or her tier based on their estimated usage. If they find that they are using more then we'd trust them to upgrade. We ask for trust and so we also give trust. If a trader uses more than the tier limit then nothing happens, they won't suddenly be stopped from making another trade. If they find that they are doing so regularly though we'd expect that they would be honourable and upgrade.

As for the pricing itself. The pricing is flat fee. The trader chooses where they should be. The price comparisons take into account the fact that our margin is flat too and that there is no spread padding. Most if not all ECN's for example charge margin based on the underlying symbol, so if you are trading the GBPUSD then that costs considerably more to trade that the USDJPY.

If we get others who are confused by our pricing then we'll happily remove the comparison part.

I don't think the actual pricing could be any simpler though.

e.g.

$47 allows you to trade up to 20 RT full size trades,

etc.

$247 allows you to trade up to 90 RT full size trades,
.
etc.

We think that the trader knows what they are currently paying and what their usage is. Thus this is simply a menu that they can choose from.

Everyone has a favourite Broker, your $5 RT sounds just fine, if you are happy there and that they tick of all of your boxes then good for you.

Hopefully every trader will be equally diligent when making their own decisions. If the trader recognises that our pricing is meritorious then great, if not then thats just fine too.

Thanks.

4of7

IMPORTANT NOTICE:

We sincerely apologize but Tier 10 and Tier 11 are now full, and we are no longer accepting applications for those tiers.

If in the future some members close their accounts then those on our waiting list will be notified on a first come, first served basis.

Trader 4of7 @ TheCollectiveFX.com

oh... just saw this thread righ now and would be interested to have more informations, demo etc... still possible?
thanks

Please feel free to request the demo from our site. It is only Tier 11 and Tier 10 that are unavailable at this time.

Thanks.

Trader 4of7 @ TheCollectiveFX.com