I'm covering the products of the future Trade Commission USA (CFTC) efforts to redesign the regulatory structure that governs the Forex since it opened earlier this year. 30 August CFTC officially published final rules relating to retail off-Exchange foreign currency transactions. Rules for the implementation of Dodd Frank Wall Street reform and Consumer Protection Act and the food, conservation, and energy from 2008, which provide the CFTC with the broadest powers of registration and regulatory bodies wishing to act as counterparties to or intermediate, retail operations with foreign currency (forex). "
Not only the CFTC clearly established its power to be principal regulator Retail forex, but it also sets out specific rules. Among them there are restrictions on the shoulder of major currency pairs and 20: 1 to other retail forex transactions. " [It is not clear at present what specific currency pairs will be classed as major]. Remember that the initial proposal (which, together with my approval, a strong protest) called for reducing leverage to 10: 1. Due to negative feedback from merchants and brokerage attributed to changes in malicious political motives and claim that it will move the entire industry, offshore, CFTC caved in and implemented only a modest decline of leverage.Nevertheless, it is important to note that the National Futures Association (NFA), as well as individual brokers will have discretion in establishing the limits a credit shoulder, lower than read. without a doubt, will continue to be some opposition from merchants, but I think we can all agree that the new rule is a fair compromise.
As for the assertion that traders will be moved their accounts offshore it will be mostly moot, since all brokerage, irrespective of their nationality, must be registered with the CFTC and the regulation/supervision.Of course those traders who are so inclined still found a way to circumvent the rules by transfers "illegally" unregistered broker, but they do so at your own risk and you shall have no recourse against fraud as Forbes said, "it seems the new rules will put an end to the Americans, trade Retail forex offshore evade CFTC rules. This trend picked up pace in recent years, and it will quickly reversed. "
Broker must be registered as a Futures Commission merchants (FCMs) or retail foreign exchange dealers (RFEDs). they will maintain a "net capital 20 million plus 5% of the amount, if any, in which commitments to Retail forex customers in excess of $ 10 million," despite the fact that this rule will raise barriers to entry for potential forex basic brokerage, it will protect consumers from bankruptcy broker.In addition, receiving orders, discretionary trading or also act pools with Retail forex will have to register, either as an introduction to brokers, commodity trading advisors, commodity pool operators (if necessary) or associated persons of such organizations.
One change in the final rule is to be noted is quite interesting: brokerages should "disclose, on a quarterly basis, the percentage of non-discretionary accounts are realised profit, save and make this calculation."This calculation is useful both in and of itself, as well as to identify any major differences between competing brokers. for the first time we will be able to see whether forex trading is currently profitable (i.e. those who arrived in the majority and minority) and whether and how the rate of return will change over time, taking into account the conditions of a specific market.
The new regulations take effect on October 18.
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