Two new releases indicate that the NFA is serious about regulating the off-exchange foreign currency markets
On our sister website, www.forexlawblog.com, we have detailed the continued regulatory actions by the NFA with regard to the current regulation of the off-exchange forex markets. The two notices, described in further detail below, apply to Forex Dealer Member and their interactions with their clients. While the CFTC has been slow to promulgate rules regarding the expected new Forex regulations, the NFA has acted swiftly and addressed many important issues. However, forex managers should still get ready for coming forex regulations – a collegue of mine has recently discussed forex registration with a CFTC compliance person and that person expects that proposed rules will be promulgated within the first quarter of next year. As always, stay tuned as we will continue to stay on top of this issue.
A summary of the two NFA actions is included below.
NFA Revises Notice Impacting Forex Dealer Members deals with (i) information the FDM must supply to the NFA regarding its forex trading platform, (ii) operational information, (iii) customer reporting items, (iv) procedures to determine uniform settlement prices, and (v) outside audit requirements of the FDM’s systems.
NFA Proposes New Compliance Rule deals with proposed new Rule 2-44 which requires FDMs to provide customers with statements according to the rule. The rule deals with the following issues: Confirmations; Daily Statements (can be provided electronically with customer’s consent); Monthly Statements; and, Other guidance on options, displaying account equity, and guidance on adjustments. Compliance Rule 2-36, which previously dealt with many of these issues, was amended so that its provisions comport with Compliance Rule 2-44.
Other related forex registration articles on Hedge Fund Law Blog include:
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