FINRA Jumps on Forex Regulation Bandwagon

Regulatory Agency Proposes Leverage Limit

FINRA Member firms which engage in off-exchange forex transactions with retail customers may face leverage limits if a new FINRA proposed rule is adopted.  The new rule would limit the leverage which a member firm could provide to a retail forex investor (i.e. an investor who is not an eligible contract participant) to 1.5 to 1.  Many forex dealers currently provide leverage of 100 to 1 or more.  FINRA cites the volatility of the forex markets and investor protection as reasons for the very low leverage limits.  FINRA will be accepting comments on this proposal until February 20, 2009.

For a reprint of the full release, please see FINRA Forex Proposal.

January 27, 2009 | Filed Under Laws and Regulations

 

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