On February 23, the National Futures Association (NFA) submitted to the Commodity Futures Trading Commission for approval proposed amendments to NFA Financial Requirements Section 11 and the Interpretive Notice regarding Forex Transactions applicable to FDMs. The amendments would revise the alternative net capital requirements in Section 11(a). Currently, an FDM must maintain minimum adjusted net capital equal to the greater of (i) $15 million (to be raised to $20 million on May 16, 2009) or (ii) 5% of all liabilities owed to forex customers. As proposed to be revised, the rule will require FDMs to maintain adjusted minimum net capital equal to $15 million ($20 million as of May 16, 2009) plus 5% of all forex customer liabilities in excess of $10 million. FDMs using straight-through-processing for all customer transactions would not be required to take the additional 5% charge.
NFA also proposed amendments to NFA Financial Requirements Section 12, which relates to security deposits that must be maintained by FDMs. The amendments would retain the current security deposit requirement of 1% of the notional value for certain “major currencies” and a 4% of the notional value for all other currencies, but delete the exemption from the security deposit requirement for FDMs that maintain adjusted net capital equal to or in excess of 150% of their capital requirements.