Attention All US Traders This message is for US traders ONLY: NFA is temporarily increasing margin requirements on GBP pairs to 5% effective 5:00PM EST on Monday, November 7.
Why should brokers be expected to lose money when an underlying moves beyond the collateral posted for a futures position? If you were a broker would you expect that you couldn't increase collateral requirements when volatility made it possible that your customers could lose more money than they had in their accounts and cause you to have to eat the cost? As a fellow customer of these guys, do you think it's fair that you have to have your positions tied up for months while you wait for insurance to pay out because some customers bankrupted your broker? Sorry, but that's just an asinine comment.
Hi Everyone, To provide some additional background to my previous post, this ruling was issued Friday by the NFA which regulates forex trading in the US. We were notified ourselves only that afternoon which is why I shared this information on the forum as soon as I could. Below is the full text of the NFA notice: http://www.nfa.futures.org/news/news...ArticleID=4759 Notice I-16-25 November 04, 2016 Immediate attention required – Financial Requirements Section 12 – Increase in required minimum security deposit for forex transactions NFA Financial Requirements Section 12 requires FDMs to collect and maintain a minimum security deposit of 2% of the notional value of transactions in 10 listed major foreign currencies and 5% of the notional value of other transactions. Importantly, Section 12 also permits NFA's Executive Committee to increase these requirements under extraordinary market conditions. Given the recent events involving the U.K. exiting the European Union (Brexit) the Executive Committee has determined to increase the minimum security deposits required to be collected and maintained by FDMs under Section 12 for currency pairs involving the British pound to a minimum of 5%. This increase is effective as of 5 p.m. (CST) on November 7, 2016 and remains in effect until further notice. FDMs are also reminded that the Executive Committee raised the minimum security deposit required to be collected and maintained under Section 12 for currency pairs involving the Mexican peso to a minimum of 6% in January 2015. Given the recent volatility surrounding the Mexican peso, each FDM must ensure that it continues to adhere to this increased security deposit amount. If you have any questions on these requirements, please contact Sarah Walsh, Associate Director, Compliance (sawalsh@nfa.futures.org or 312-781-1202) or Shana Dunnigan, Manager, Compliance (sdunnigan@nfa.futures.org or 312-781-1379).