NFA guidelines on the use of social networking groups

On-line Social Networking Groups – Proposed Amendments to NFA’s Compliance Rule 2-29(h) and Adoption of Interpretive Notice On-line social networking groups have changed the way people make trading decisions. A number of NFA Members sponsor blogs, chat rooms, and forums (also called message or...

NFA proposes amendments to the Interpretive Notice regarding Forex Transactions

NFA Bylaw 1301(e) requires Forex Dealer Members to pay annual dues that are graduated according to the firm’s gross annual revenue from customers (e.g., commissions, mark-ups, mark-downs) for its forex activities. Profits and losses from proprietary trades are not to be included. To calculate dues: •...

NFA proposes amendments to Financial Requirements Section 15 regarding FDM internal financial controls

Financial Requirements Section 15 currently requires firms to provide NFA with an internal control report prior to acting as an FDM. This report must be prepared by an independent public accountant registered with the Public Company Accounting Oversight Board and must include representations by the...

Congress Urged to Close Zelener Loophole

NFA President Daniel Roth and Executive Vice President Daniel Driscoll urged Congress to close the Zelener loophole for non-forex products. In the CFTC vs. Zelener case, the U.S. Court of Appeals for the Seventh Circuit concluded that the rolling spot contracts in question did not qualify as futures...

Prohibition of loans by commodity pools to CPOs and affiliates

NFA Compliance Rule 2-45 prohibits direct or indirect loans or any advance of pool assets between a pool and its CPO or any other affiliated person or entity, though participants, including a CPO’s principal, may barrow against their equity interests in a pool. Exemptions are to be handled on a case by...

New security deposit requirements cap leverage

FDMs must collect security deposits of 1% of notional value on major currency pairs and 4% on other currency pairs. FDMs that maintain 150% of their capital requirement will be exempted. The Interpretive Notice cites customer safety as a reason for the leverage restrictions. It also notes that the new...

New capital requirements for FDMs

In addition to the $20 million required by the CFTC Reauthorization Act of 2008, FDMs with over $10 million in customer liabilities and will be subject to capital requirements that take into account their total liabilities. FDMs that execute customer transactions exclusively via STP will be exempted. In...

NFA Defines Forex Dealer Member

NFA Announcement: Definition of a Forex Dealer Member: Proposed Amendments to NFA Bylaw 306, NFA Financial Requirements Section 11(a), and the Interpretive Notice Regarding Forex...

NFA Announcements

NFA Announces Increase to FDM Capital RequirementsOn August 27, 2008, NFA announced that the capital requirements for Forex Dealer Members (FDMs) imposed by CFTC Reauthorization were approved by NFA’s Board of Directors. Particularly Section 1, 11, and 12 will be modified pursuant to CFTC...