Breaking: FXCM Faces $200,000 Fine for NFA Breaches
by
Adil Siddiqui
Listed FX broker, FXCM, has received a financial penalty from the National Futures Association for dealing with an unregistered firm and failing to report trading data. The broker was fined $200,000.
US financial regulator for derivatives organizations, the National Futures Association (NFA), has issued a monetary penalty to New York listed brokerage firm, FXCM. The broker is reported to have breached a number of regulatory rulings, these include dealing with an unregistered firm and for the failure to report trading data.
The fine comes during a sensitive period for global FX markets, as investigations into currency rates manipulation by banking staff has caused friction in the markets.
The financial watchdog reacted to a complaint against the broker, which stated that FXCM was conducting business with a firm that was supposed to hold necessary registrations to operate in financial markets trading. The firm was required to be registered with the CFTC as a commodity pool operator (CPO) and as an NFA member.
FXCM, a global financial services firm, is one of the largest operators in the sector, with offices in key financial centers in the UK, USA and Hong Kong. The broker has been coordinating with the regulator in response to the complaint, and has rectified the shortfalls in its procedures.
A spokesperson at FXCM commented about the fine in an exclusive statement to Forex Magnates, saying: βFXCM has settled a complaint brought by the NFA relating to charges of doing business with an unregistered entity and for failing to submit certain trade data reports.
FXCM has resolved these matters and has taken steps to avoid similar occurrences in the future."
Details in the complaint state that, RFF GP LLC (RFF) a general partner of Revelation Forex Fund, had filed an exemption for registration under the CFTC's Regulation 4.13(a)(3), which meant that if it met the regulators criteria it did not need to be registered. However, the regulator states that the firm did not qualify for exemption and FXCM did not take sufficient steps to address this.
Furthermore, FXCM was in breach of NFA rulings relating to trade reporting. The final decision, which was issued by the Business Conduct Committee, found that the brokerage firm had failed to submit trade data to the NFA through NFA's Forex Transaction Reporting Execution Surveillance System known as FORTRESS.
The NFA website lists detailed criteria firms need to fulfil in order to be exempt from registration, these include, '(The firm) does not receive any compensation or other payment, directly or indirectly, for operating the pool, except reimbursement for the ordinary administrative expenses of operating the pool.'
CTAs and CPOs who believe they fulfil the regulator's criteria can submit an online application for exemption, the regulator has a video tutorial on its website to describe the process.
FXCM's share price closed in the green, trading at $13.34 in New York, up 1.68%.
US financial regulator for derivatives organizations, the National Futures Association (NFA), has issued a monetary penalty to New York listed brokerage firm, FXCM. The broker is reported to have breached a number of regulatory rulings, these include dealing with an unregistered firm and for the failure to report trading data.
The fine comes during a sensitive period for global FX markets, as investigations into currency rates manipulation by banking staff has caused friction in the markets.
The financial watchdog reacted to a complaint against the broker, which stated that FXCM was conducting business with a firm that was supposed to hold necessary registrations to operate in financial markets trading. The firm was required to be registered with the CFTC as a commodity pool operator (CPO) and as an NFA member.
FXCM, a global financial services firm, is one of the largest operators in the sector, with offices in key financial centers in the UK, USA and Hong Kong. The broker has been coordinating with the regulator in response to the complaint, and has rectified the shortfalls in its procedures.
A spokesperson at FXCM commented about the fine in an exclusive statement to Forex Magnates, saying: βFXCM has settled a complaint brought by the NFA relating to charges of doing business with an unregistered entity and for failing to submit certain trade data reports.
FXCM has resolved these matters and has taken steps to avoid similar occurrences in the future."
Details in the complaint state that, RFF GP LLC (RFF) a general partner of Revelation Forex Fund, had filed an exemption for registration under the CFTC's Regulation 4.13(a)(3), which meant that if it met the regulators criteria it did not need to be registered. However, the regulator states that the firm did not qualify for exemption and FXCM did not take sufficient steps to address this.
Furthermore, FXCM was in breach of NFA rulings relating to trade reporting. The final decision, which was issued by the Business Conduct Committee, found that the brokerage firm had failed to submit trade data to the NFA through NFA's Forex Transaction Reporting Execution Surveillance System known as FORTRESS.
The NFA website lists detailed criteria firms need to fulfil in order to be exempt from registration, these include, '(The firm) does not receive any compensation or other payment, directly or indirectly, for operating the pool, except reimbursement for the ordinary administrative expenses of operating the pool.'
CTAs and CPOs who believe they fulfil the regulator's criteria can submit an online application for exemption, the regulator has a video tutorial on its website to describe the process.
FXCM's share price closed in the green, trading at $13.34 in New York, up 1.68%.
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Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
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From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
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Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
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The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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