Breaking: NFA Mandates Forex Brokers to Disclose Costs per Trade to Clients
- The National Futures Association in the US is imposing a new disclosure requirement on brokers
The US National Futures Association (NFA) has issued a new disclosure requirement on brokers. Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term dealers in the US must provide a detailed breakdown of transaction costs to their clients whenever a customer demands the information.
The NFA outlines that brokers will need to be able to provide a detailed breakdown of per-trade costs. Forex brokers need to disclose any commissions and any other fees related to every trade.
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For brokers that are executing their order flow via Straight Through Processing (STP), firms have to provide a breakdown on any mark-ups or mark-downs they imposed on the price that they received for offsetting the position.
Brokers that are not processing orders on an STP basis, have to disclose the mid-point spread cost. This is defined by the NFA as the difference between the price at which the Forex Broker Forex Broker In the forex space, a broker is any company that can provide traders with access to a platform that permits the buying and selling of multiple currencies.The retail forex industry has grown over the past two decades to include every major jurisdiction, which in turn has necessitated new regulatory oversight. Relative to the institutional sector, retail brokers are rather small portion of the greater forex market. However, traders can rely on brokers for leveraged trading in a 24-hour-a-day marke In the forex space, a broker is any company that can provide traders with access to a platform that permits the buying and selling of multiple currencies.The retail forex industry has grown over the past two decades to include every major jurisdiction, which in turn has necessitated new regulatory oversight. Relative to the institutional sector, retail brokers are rather small portion of the greater forex market. However, traders can rely on brokers for leveraged trading in a 24-hour-a-day marke Read this Term is executing the order of the client and the mid-point of the bid/ask spread at the time when the order was executed.
Forex dealers in the US will have to inform their clients diligently about the new rule and make sure their clients know and can request the information from their brokerage.
ProposedAmendmentstoNFAComplianceRules2-36and2-43RetailForexCosts by TorVik on Scribd
The US National Futures Association (NFA) has issued a new disclosure requirement on brokers. Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term dealers in the US must provide a detailed breakdown of transaction costs to their clients whenever a customer demands the information.
The NFA outlines that brokers will need to be able to provide a detailed breakdown of per-trade costs. Forex brokers need to disclose any commissions and any other fees related to every trade.
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For brokers that are executing their order flow via Straight Through Processing (STP), firms have to provide a breakdown on any mark-ups or mark-downs they imposed on the price that they received for offsetting the position.
Brokers that are not processing orders on an STP basis, have to disclose the mid-point spread cost. This is defined by the NFA as the difference between the price at which the Forex Broker Forex Broker In the forex space, a broker is any company that can provide traders with access to a platform that permits the buying and selling of multiple currencies.The retail forex industry has grown over the past two decades to include every major jurisdiction, which in turn has necessitated new regulatory oversight. Relative to the institutional sector, retail brokers are rather small portion of the greater forex market. However, traders can rely on brokers for leveraged trading in a 24-hour-a-day marke In the forex space, a broker is any company that can provide traders with access to a platform that permits the buying and selling of multiple currencies.The retail forex industry has grown over the past two decades to include every major jurisdiction, which in turn has necessitated new regulatory oversight. Relative to the institutional sector, retail brokers are rather small portion of the greater forex market. However, traders can rely on brokers for leveraged trading in a 24-hour-a-day marke Read this Term is executing the order of the client and the mid-point of the bid/ask spread at the time when the order was executed.
Forex dealers in the US will have to inform their clients diligently about the new rule and make sure their clients know and can request the information from their brokerage.
ProposedAmendmentstoNFAComplianceRules2-36and2-43RetailForexCosts by TorVik on Scribd