For Release: August 30, 2007
CFTC’s Division of Clearing and Intermediary Oversight Issues Advisory on Forex Transactions
Washington, DC – The Division of Clearing and Intermediary Oversight (DCIO) of the Commodity Futures Trading Commission (CFTC) has issued an Advisory concerning retail off-exchange foreign currency futures or option (forex) transactions.
The DCIO Advisory addresses the following issues: (1) registration requirements for associated persons of firms registered as introducing brokers (IBs), commodity trading advisors, and commodity pool operators that are involved in forex transactions; (2) the permissibility of certain unregistered affiliates of a futures commission merchant (FCM) to act as proper counterparties in forex transactions; (3) claims that forex customer funds are segregated; (4) introducing entities acting as FCMs; (5) the applicability of the IB guarantee agreement to forex transactions and prohibiting guaranteed IBs from introducing forex transactions to an FCM that is not its guarantor FCM; (6) prohibiting forex account statements of an FCM’s unregistered affiliate from being included in the FCM’s account statements to its customers; and (7) prohibiting retail customers from acting as counterparties to each other in forex transactions.
The Advisory may be accessed at the CFTC’s website at /ConsumerProtection/FraudAwarenessPrevention/ForeignCurrencyTrading/index.htm.
R. David Gary
Last Updated: July 7, 2010