In a Notice to Members dated May 15, the National Futures Association (NFA) announced that the Commodity Futures Trading Commission has approved new Section 14 of NFA’s Financial Requirements (Assets Covering Liabilities to Retail Forex Customers).
The new rule requires Forex Dealer Members (FDMs) to maintain sufficient assets at qualifying institutions located in the U.S. or a money center country (as defined in CFTC Regulation 1.49) to cover their liabilities to U.S. retail customers. The CFTC also approved a related amendment to an NFA Interpretive Notice. As amended, the Notice prohibits FDMs and their associates and agents from representing that forex funds are more secure because of the new requirements under Section 14. The amendments become effective July 1.