NFA Gets Ready for Forex Registrations
The NFA is getting ready to begin processing applications for all of the new Forex registrations which will need to be completed once the CFTC approves rules that require the registration of managers who advise on retail off-exchange forex transactions. If you currently manage spot forex accounts or forex hedge funds you will need to be registered soon and you should contact us if you have any questions.
The whole press release, reprinted below, can be found here.
NFA prepares for influx of forex registrations
The CFTC Reauthorization Act of 2008, enacted by Congress as part of the Farm Bill in May, creates a new registration category for any firm that acts as the counterparty to retail off-exchange foreign exchange contracts. In addition, the legislation requires any firm or individual whose business involves retail off-exchange foreign exchange (forex) contracts to register with the CFTC and become Members of NFA. Although the CFTC is still writing its forex regulatory and registration requirements, NFA has already begun taking the steps necessary to process the new forex applications.
“Because the new requirements create a new registration class called Retail Foreign Exchange Dealers, we have had to make several enhancements to our Online Registration System (ORS),” said NFA’s Vice President of Registration Greg Prusik. “We are also making additional adjustments to identify as ‘forex firms’ those FCMs, IBs, CTAs and CPOs that will be dealing in retail off-exchange forex trading.”
In addition to firm applications, NFA is also enhancing ORS to handle applications from APs associated with forex firms who will be dealing with retail forex customers. These APs will be identified as “forex individuals”.
“We have developed a new proficiency examination specific to retail forex activity, called the Series 34 exam,” said Prusik, “and have recommended to the CFTC that its forex rules require any individual applying for registration as a Forex AP to take and pass both the Series 3 exam and the Series 34.”
NFA also has recommended, however, that the CFTC “grandfather” any AP who was registered as of May 22, 2008, exempting them from the requirement to take and pass the Series 34 exam. “This would be consistent with NFA’s treatment of registered APs at the time the Series 3 was first implemented,” said Prusik.
Since almost all registration transactions are conducted electronically, firm annual update processing, firm withdrawal processing and individual termination processing are also being enhanced to handle the new RFED class and the “forex firm” and “forex individual” statuses.
“At this point, we don’t know how many forex firms and individuals will be applying for registration,” said Prusik. “However, we do know that we want to have all of our systems in place and ready to begin processing registrations by the end of this calendar year.”
Once the CFTC rules are finalized, NFA will provide educational materials, including a Web seminar, to help new registrants through the registration process.
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