Forex

Forex Transactions A Regulatory Guide

December 2009

Table of Contents
Introduction ......................................................................................... 1 Registration ......................................................................................... 2 Counterparties ......................................................................................... 2Associated Persons ................................................................................. 2 Introducing Entities .................................................................................. 2 Account Managers ................................................................................... 3 Pool Operators......................................................................................... 3 Members Subject to the Forex Requirements ......................... 4 Soliciting Customers ........................................................................ 5 Customer Information and Risk Disclosure ............................................. 5 Communications with the Public and Promotional Materials ................... 6 Customer Orders................................................................................ 9 Managing Customer Accounts ................................................................. 9 Offsetting Transactions ............................................................................ 9 Price Adjustments .................................................................................... 9 Recordkeeping and Reporting.................................................... 11 Recordkeeping Requirements ................................................................ 11 Customer Statements ............................................................................ 11 Supervision ........................................................................................ 14 Doing Business with Non-Members........................................... 18 Dues ..................................................................................................... 20 Security Deposits ............................................................................ 22 Financial Requirements ................................................................ 24 Forex Dealer Member Capital Requirements........................................ 24 Net Capital Calculation .......................................................................... 24 Financial Books and Records ................................................................ 27 Financial Internal Controls ..................................................................... 28 Weekly Forex Reporting Requirements................................................. 28 Anti-Money Laundering Programs .............................................. 30 Developing Policies, Procedures, and Internal Controls ....................... 30 Other Requirements ............................................................................... 32 Bulk Assignment or Liquidation ................................................. 34 Bulk Assignments and Transfers........................................................... 34

Bulk Liquidations .................................................................................... 35 Records .................................................................................................. 36 Ceasing Business .................................................................................. 36 GeneralRequirements ................................................................... 37 Privacy Rules ......................................................................................... 37 Business Continuity and Disaster Recovery Plans ................................ 38 Appendix 1: Selected NFA Forex Rules ........................................... 39 Appendix 2: NFA Interpretive Notices...