The NFA website has posted some updated documents including Disclosure Documents, Forex Reg Guide, Comp Rules 2-29, and the Self Examination Checklist. To view these documents please visit www.nfa.futures.org they will be listed under the NFA Today category....

Notice to Members I-10-21 October 13, 2010 NFA offers guidance on CFTC’s final forex regulations The Commodity Futures Trading Commission’s (CFTC) final Forex regulations are effective on October 18, 2010. NFA staff has received a number of inquiries from Members seeking further guidance and clarification on certain requirements. Based on further consultation with CFTC staff on Friday, October 8th, this Notice provides additional guidance on the following areas: Risk Disclosure Statement Required by CFTC Regulation 5.5 CFTC Regulation 5.5 prohibits FCMs, RFEDs, and in the case of an introduced account, IBs from opening a retail Forex account until the FCM,…...

In my role as Chairman of NIBA, I was invited to represent our organization at the CFTC Staff Roundtable held in Washington, DC on September 16. The topic was OCR (Ownership and Control Report), a proposed regulation scheduled to take effect as early as January 2012. Also present were representatives from several U.S. exchanges, CTAs and a working group associated with FIA. Among other things, this regulation will require all defined “reporting entities,” a/k/a “root data sources,” to provide increased account ownership and control information, not only at the time of opening, but on a continuing weekly basis in a…...

On January 3, 2011, amendments will become effective to NFA Compliance Rule 2-30, commonly referred to as the Know-Your-Customer Rule. (See also NFA website and Notice to Members I -10-15 dated July 28, 2010).  Hopefully, everyone is well versed with the current rule which requires NFA Members to obtain information about their customers and provide appropriate risk disclosures. Note, however, that the forthcoming amendments will broaden your responsibilities. The changes to the Rule can be summarized as follows:  The Rule will soon apply not just to individual customers, but ALL non-ECP customers;  FCM Members must annually request that active customers…...

Everyone who has tried their hand at marketing has obsessed over the content of an ad or promo piece, and we have all struggled with the difficulty of reaching and engaging our target audience. I won’t diminish the importance of the message, but to reach certain audiences, the medium of communication may be as important as the message you are sending. In 1964, Marshall McLuhan declared that” the medium was the message”. He couldn’t possibly foresee Twitter or even the internet, but his words are truly prophetic. Media has transcended the mere delivery of information and become interactive, even social.…...

Due to the rapid rise and rapid fall of the crude oil market in 2008, the CFTC has recently proposed a new rule on speculative position limits for the energy markets. Numerous comments have been sent to the Commission and the debate is ongoing over the economic, legal and philosophical merits of imposing position limits on these very liquid markets. It’s all very interesting and important, but rather than debating the merits of these proposed rules, in this article, I would like to demonstrate for you that the current rules on speculative position limits can have unusual and surprising consequences…...

Independent Introducing Broker Net Capital Requirements Independent Introducing Brokers (“IIB”) or non-guaranteed Introducing Brokers have a capital requirement mandated by the NFA Rules and CFTC Regulations. The following will discuss such capital requirements and reporting requirements of an IIB. Required Financial Statements  IIBs are required to maintain an accounting system which records all of the IIB’s financial activity. The financial statements created from the accounting system must be prepared following U.S generally accepted accounting principles (“GAAP”), on an accrual basis, and kept current. Net Capital  Net Capital is generally defined as Assets less Liabilities. However, NFA financial requirements and CFTC…...