At the start of each trading session, you will receive an email with the author's new posts. The proposal seeks to adopt a new regulatory scheme to implement the CFTC Reauthorization Act of In particular it strives to address the way the federal agency will deal with off-exchange transactions in foreign currency with the retail public. While reading through these items please note that they are not the only changes to the law which have been proposed.

Rather, these items represent what will be the most significant changes to the industry through the eyes of a former regulator and industry professional; they are presented in order of most important to least. Items 1 and 2: Based on this definitional adjustment the CFTC will now have the legal ability to require forex professionals to register with the agency.

This provision of the proposal is likely to be more devastating to the United States forex industry than any other. If they were to do so, the level of liability as well as the capital required to stand behind the performance of such entities would be staggering.

United States - NFA and CFTC Forex Regulation News

Further this requirement completely eliminates the role of an independent IB as it calls for each guaranteed IB to introduce client accounts to only its guarantor RFED. This will greatly reduce consumer and IB strategy options and may also cause clients to open relationships with multiple brokerage houses.

For these two reasons, and the requirement discussed below in item 4, third party forex brokerage as it currently exists will be under tremendous stress. Forex Transactions Must Adhere to There has been more written about this portion of the CFTC proposal than any other and perhaps rightfully so. Currently in the US firms are able to offer clients Although the CFTC may believe that lowering leverage from It is largely anticipated that in the event leverage in the US is reduced from Individual traders have voiced publically that they are unwilling to post higher levels of margin to trade within the United States.

Therefore, if the objective of the CFTC is to protect US investors with their new proposal and this occurs, they may actually be making matters worse. If US clients are encouraged to move their accounts abroad on to pursue higher leverage, the CFTC will then no longer have jurisdiction over the companies handling those accounts and the point will become moot.

The implications here are far reaching; especially when one considers the size of the global forex market space. Furthermore, reducing leverage by as much as ten times will also drastically reduce off exchange retail currency trading volumes for RFEDs. If this were to occur these firms would likely seek out new forms of revenue in order to supplement falling profit margins. The CFTC will accept comments for at least sixty days 60 starting from January 7th, After this apexinvesting binary options on iphone sure to include the proposals identification number which is RINAC61 in the body of your message.

Industry professionals that have not yet registered with the CFTC and elected to become NFA members; now is the time. It is possible that the CFTC may alter some of its proposed amendments if it deems the comments received from the public are reasonable. However, it is highly unlikely that the requirement cftc forex regulations all forex professionals to become CFTC registrants and members of a DSRO will be omitted.

In just a short period of time every forex firm in make money casino affiliate country will be required to register and this will create skills required to become a stockbroker massive back log with the NFA.

To learn more about this process it would be advisable to contact a regulatory professional and seek advice immediately.

Due to the time sensitive nature of this requirement it would also be wise to look for a company that is well versed in forex compliance. Individuals who trade retail forex will need to consider the implications of having to post as much as ten times more capital to hold trades open. This will materially alter trading strategies and significantly reduce the size of the positions that a person can initiate.

Customers should speak with their respective brokerage houses, the CFTC, NFA, and their legislators to let them know how this rule will impact their trading. Information on these pages contains forward-looking statements that involve risks and uncertainties.

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Foreign Currency Trading - CFTC

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Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

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This change grants the CFTC jurisdiction over the United States retail forex market. The Implications Items 1 and 2: Options and the Long Road Ahead Share Your Thoughts: Filter by topic or author in Education Results. CFTC Forex Proposal; US Retail Market to Disappear?