As we announced earlier, the NFA promulgated rules which were approved by the CFTC which gave the NFA jurisdiction over retail off-exchange foreign exchange trading by its member firms. What this essentially means is that if:
(i) you are currently a NFA member (e.g. you have a commodity/ futures pool or direct commodity/ futures accounts) and
(ii) you trade forex in the pool or account, or have an outside pool or account devoted to forex trading,
then you will need to update your disclosure documents with the NFA. The disclosure documents will need to contain all of the information required for non-forex disclosure documents and the update must be completed by November 30. Please see NFA to Begin Regulating Forex.
Prior to the rule registered CPOs and CTAs did not have to have separate disclosure documents if they had separate forex programs, although such managers could optionally submit their disclosure documents to the NFA for review.
Please note that this is completely different than the new forex registration rules which will require non NFA members (i.e. those managers who only trade in the off-exchange markets and who would thus not be required to be registered) to register with the CFTC and become members of the NFA. These new forex registration rules have not yet been promulgated.
If you are a manager who this applies to, we recommend you begin the process with the NFA immediately. Please contact us if you would like to discuss with an attorney.
Forex Only Managers
Likewise, we recommend that managers who are not NFA members and who trade only off-exchange foreign exchange contracts become registered with the CFTC as soon as possible. We believe that if you begin this process right now that you will be able to avoid much of the congestion that is expected to develop once final rules and regulations are promulgated. Please feel free to contact us for a free consultation with a forex attorney on this matter.