March 27, 2008

Supervision of Forex Promotional Materials: Effective Date of Amendments to the Interpretive Notice Regarding Forex Transactions

NFA has received notice that the Commodity Futures Trading Commission (“CFTC”) has approved amendments to the Interpretive Notice entitled “Forex Transactions.” The amendments will become effective on July 1, 2008.

The amendments require that the supervisory employee responsible for reviewing a Forex Dealer Member’s (“FDM’s”) promotional materials be under the ultimate supervision of a principal who is also an NFA Associate. As a result of this amendment, an individual principal of the FDM may be held responsible for the use of fraudulent or misleading promotional materials.

The amendments further make clear that an FDM must adopt and enforce written supervisory procedures for reviewing the activities of non-Members with which they do business. Among other things, these procedures must include the regular review of trading being conducted in the accounts solicited, introduced, or managed by these non-Members; procedures for following up on any customer complaints regarding the non-Members; and the regular review of promotional materials used by the non-Members. Just as with an FDM’s own promotional activities, the review of the non-Member’s activities must be conducted by a supervisory employee that is under the ultimate supervision of a listed principal that is also an NFA Associate.

A copy of the relevant sections with amendments marked is attached for your convenience. Additionally, NFA’s November 29, 2007, submission letter to the CFTC contains a more detailed explanation of the changes. You can access an electronic copy of the submission letter at: http://www.nfa.futures.org/news/newsRuleSubLetter.asp?ArticleID=2006.