{"id":31149,"date":"2012-07-26T14:27:19","date_gmt":"2012-07-26T18:27:19","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=31149"},"modified":"2012-07-26T14:27:19","modified_gmt":"2012-07-26T18:27:19","slug":"nfa-tightens-fcm-and-rfed-requirements","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/07\/26\/nfa-tightens-fcm-and-rfed-requirements\/","title":{"rendered":"NFA Tightens FCM and RFED Requirements"},"content":{"rendered":"

By forexindustryinsider.com<\/strong><\/a><\/span><\/p>\n

In a \u201ctechnical amendment\u201d notice made to the NFA\u2019s Forex Requirements the NFA announced several new requirements for all FCMs\/RFEDs operating in the US.\u00a0 The NFA listed these as \u201cminor amendements\u201d, and while a couple of the changes minor, one is somewhat more substantial.<\/p>\n

The full amendment reads:<\/p>\n

Notice I-12-16<\/strong><\/p>\n

July 26, 2012<\/p>\n

Effective Date of Technical Amendments to NFA\u2019s Forex Requirements<\/strong><\/p>\n

NFA recently made several minor amendments to its forex requirements \u2013 amending NFA Financial Requirements Section 14<\/a> and the interpretive notice entitled Forex Transactions<\/em><\/a> to conform the requirements to applicable CFTC Regulations and amending the interpretive notice related to bulk assignment and liquidation<\/a>
\nto clarify the reporting responsibilities of assignor\/transfer or FDMs
\nand assignee\/transferee FDMs. These amendments, which are described more
\nfully below, do not impose any additional or new obligations on FDMs
\nand are effective immediately.<\/p>\n

NFA Financial Requirements Section 14<\/span><\/strong><\/p>\n

NFA Financial Requirements Section 14 and CFTC Regulation 5.8(a)
\nrequire FCMs\/RFEDs to calculate the amount owed to retail forex
\ncustomers and hold assets equal to or in excess of that amount in one or
\nmore qualifying institutions. Currently, Section 14 requires the
\ncalculation only with respect to U.S. customers while the CFTC
\nrequirement applies to all retail forex customers. Therefore, NFA is
\namending Section 14 to remove the reference to U.S. customers.<\/p>\n

NFA\u2019s Interpretive Notice entitled Forex Transactions<\/em><\/span><\/strong><\/p>\n

In September 2011, as required by the Dodd-Frank Act, the CFTC
\nimplemented changes to its regulations to remove any references to
\nrelying on credit ratings. To keep NFA\u2019s requirements consistent with
\nthe underlying rationale of the CFTC\u2019s amendments, NFA is amending its
\ninterpretive notice entitled Forex Transactions<\/em> to remove
\nreferences to credit ratings as a factor NFA considers in determining
\nwhether to approve an FDM\u2019s affiliate or an unregulated person as a
\nperson which the FDM may use to hold firm assets or to cover forex
\ntransactions for purposes of calculating adjusted net capital.<\/p>\n

NFA Interpretive Notice entitled NFA Compliance Rule 2-40: Procedures for Bulk Assignments or Liquidation of Forex Positions: Cessation of Customer Business<\/em><\/span><\/strong><\/p>\n

NFA is amending its interpretive notice on bulk assignments and
\nliquidation of forex positions to clarify that immediately after the
\nbulk assignment, liquidation or transfer, Assignee\/Tranferee FDMs must
\nprovide NFA with a list of affected accounts and the value of each
\naccount as of the date of the transaction.<\/p>\n

More information on this Interpretive Notice can be found in NFA\u2019s March 8, 2012 Submission Letter to the CFTC<\/a>. Questions concerning these amendments should be directed to Rachel Brandenburg, Manager, Compliance at rbrandenburg@nfa.futures.org<\/a> or 312-781-1472 or Sarah Walsh, Manager, Compliance at sawalsh@nfa.futures.org<\/a> or 312-781-1202.<\/p><\/blockquote>\n

Original text here<\/a>
\nThe first amendment to Section 14 of the NFA Financial Requirements should make clients sleep easier and will require brokers to hold not only a percentage of US clients\u2019 funds in a qualifying bank but also a percentage of non-us clients\u2019 assets as well.\u00a0 Where a US RFED may have 400 US clients with a total of $4million on deposit, and 250 non-us clients with a total of $2 million on deposit the broker used to be required to keep between 10-40% of that $4million on deposit will not be required to keep between 10-40% of the entire $6 million on deposit.<\/p>\n

All in all, the more funds a broker has in their bank, the safer they are from liquidation \u2013 That is unless your broker has been forging bank statements for the past 20 years.<\/a><\/span><\/p>\n

Article by forexindustryinsider.com<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By forexindustryinsider.com In a \u201ctechnical amendment\u201d notice made to the NFA\u2019s Forex Requirements the NFA announced several new requirements for all FCMs\/RFEDs operating in the US.\u00a0 The NFA listed these as \u201cminor amendements\u201d, and while a couple of the changes minor, one is somewhat more substantial. The full amendment reads: Notice I-12-16 July 26, 2012 … <\/p>\n

Continue reading “NFA Tightens FCM and RFED Requirements”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-31149","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=31149"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31149\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=31149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=31149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=31149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}