New Financial Reporting Requirements for NFA Forex Dealer Members

Some new rules for forex brokers folks. It seems that every other month some new legislation and regulation is coming

Some new rules for forex brokers folks. It seems that every other month some new legislation and regulation is coming out. These latest ones are relatively minor, more like a slight tweaking.

The CFTC’s new Part 5 Regulations, which impose additional financial reporting obligations on certain Futures Commission Merchants (FCMs) that act as the counterparty to retail forex transactions and Retail Foreign Exchange Dealers (RFEDs), became effective on October 18, 2010. As a result, FCMs and RFEDs who are Forex Dealer Members (FDMs) of NFA must include the following additional information on the Exchange Supplementary Schedule of the CFTC Form 1-FR-FCM financial filings as of October 31, 2010:

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  • Gross revenue from forex transactions with retail customers;
  • Total net aggregate notional value of all open forex transactions in retail customer and non-customer (not proprietary) accounts;
  • Total aggregate retail forex assets;
  • Total amount of retail forex obligations; and
  • Retail forex related minimum dollar amount requirement.

On the front end, i.e. for us forex traders, this piece of news isn’t going to directly affect us, but it’s nice to know non-ECN brokers are being held to account, more and more. If I’m reading this right, these new reporting requirements don’t apply to ECNs, since they’re not acting as a counterparty.

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