New NFA Regulations as of October 18, 2010

Discussion in 'Forex Brokers' started by Kalparker, Aug 31, 2010.

  1. The final retail Forex regulations (which requires registration for forex CTAs, CPOs and IBs) have been published in the Federal Register. The final regulations will be effective as of October 18, 2010. The regulations were adopted essentially as written with the execption of two major issues:

    * Leverage – while the proposed rules called for a maximum leverage of 10:1, the final rules allow the NFA to determine the margin requirements for the currencies within a defined set of CFTC parmeters. Currently the parameters include 50:1 leverage for major currencies and 20:1 leverage for all other currencies.
    * Forex Introducing Brokers – the proposed rules called for all forex introducing brokers to be guaranteed by a single FCM or RFED. The final rules allow a forex introducing broker to be either guaranteed or independent, consistent with other regulated futures IBs.

    We have not yet had a chance to talk with the NFA or the CFTC about the new rules, but we recommend that all groups who may have to register with the NFA to begin the forex registration process as soon as possible (which includes taking the Series 34 exam) because of the large amount of applications the NFA will receive because of the final regulations.
  2. Its not new nfa rules, these are from the cftc.

    I think this together with the last 2 NFA updates of their fx rules makes the US is the best regulated environment for retail clients.

    What is unfortunately missing is a customer compensation scheme in the case of a firm bankruptcy, like required by all member states of the EU.