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23 September 2015
On August 27 2015 the US Commodity Futures Trading Commission (CFTC) approved rule amendments and a new interpretive notice(1) filed by the National Futures Association,(2) strengthening protections for retail customers of National Futures Association forex dealer members (FDMs). Among other things, the rule amendments:
Statements issued by Chairman Timothy Massad(3) and Commissioner Sharon Bowen(4) emphasised the heightened risks faced by retail customers investing in the foreign exchange market, including the losses that retail investors face as a result of minor price movements in the market. In her statement, Bowen further stated that the CFTC should consider imposing additional regulations on retail foreign exchange dealers (RFEDs), including:
For further information on this topic please contact Donna M Parisi, Geoffrey B Goldman or Azam H Aziz at Shearman & Sterling LLP by telephone (+1 212 848 4000) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). The Shearman & Sterling website can be accessed at www.shearman.com.
(1) The CFTC press release is available at "CFTC Approves National Futures Association Rules Enhancing Protections for Retail Forex Customers".
(2) The National Futures Association's rule submission to the CFTC is available at "National Futures Association: Proposed Amendments to NFA Compliance Rule 2-36 Regarding Requirements for Forex Transactions and Financial Requirements Sections 11 and 12 and the Adoption of the Interpretive Notice Entitled NFA Compliance Rule 2-36: Risk Management Program for Forex Dealer Members".
(3) The text of Massad's statement is available at "Statement of Chairman Timothy Massad on Enhancing Protections for Retail Forex Customers".
(4) The text of Bowen's statement is available at "Statement of Commissioner Sharon Y. Bowen on Enhancing Protections for Retail Forex Customers".
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