Goodbye NFA’s nightmare, Hello SEC!
It’s been long known behind the Forex industry’s curtains that the NFA is not the only US regulatory agency that allows you to open a Forex brokerage. The lesser known alternative is the SEC – and it is also now the most preferred one, thanks to much lower net capital requirements and much more sensible business requirements, unlike the NFA’s.
With the SEC’s current requirements all you’ll need to do in order to setup your own Forex brokerage and operate it in the US – is make sure that the custody of clients funds is with a SEC regulated advisor. That’s it. This can easily be done with hundreds of entities opening up room for the increasing number of US regulated Forex brokers, instead of decreasing their number as result of NFA’s requirements.
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Reuters cited a US Senator who said that the SEC may have an advantage over CFTC in OTC derivatives (probably includes Forex as well) – halleluyah! The sanity is back.
It remains to be seen who the regulators will decide is the right agency to regulate Forex trading. We all hope that it’s the SEC and not NFA/CFTC who went from being a regulation watchdog for the simple trader to an anti-Forex brokers evangelist.