CMS Forex fined $275,000 by CFTC for being undercapitalized


Violations occurred between 2009-2012, CMS was undercapitalized by more than $13 million at one point.

The CFTC has fined Capital Market Services LLC, parent of CMS Forex, a total of $275,000. The CFTC has found that CMS did not maintain its required capital levels during at least 17 separate months between March 2009 and October 2012, with month-end computations showing that CMS was undercapitalized by more than $13 million at one point.

The CFTC did note CMS’s cooperation and corrective action it undertook after its deficiencies were discovered.

CMS used to be a full-fledged Forex Dealer Member (FDM), allowing it to hold client capital in the US and engage in direct trades with clients. That status required capital varying between $15-21 million. After it ceased being an FDM in late 2010, CMS continued to be registered as a Futures Commission Merchant (FCM), with a much lower required capital of about $1 million.

In its FCM status, CMS acts as an Introducing Broker of Gain Capital.

To see the complete CFTC press release click here.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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CMS Forex fined $275,000 by CFTC for being undercapitalized

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