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Screenshot of a breaking news alert e-mail from Q2 2017
North American Derivatives Exchange (Nadex), part of IG Group Holdings plc (LON:IGG), has addressed the issue of its Members making use of third party services to assist with their trading experience on the Exchange.
Nadex says that in recent weeks it has received inquiries from various Members regarding the use of third party services such as trade signal providers and third party technology providers.
Nadex notes that these types of services may facilitate and improve the Member’s trading experience, but the use of these should not deter a Member from complying with the Nadex Exchange Rules. Moreover, there are several activities in the financial industry which may require registration with either the Commodity Futures Trading Commission (CFTC) or/and the Securities and Exchange Commission (SEC). For instance, a signal provider who provides advice (i.e. the trade signal) either directly to the trader or through a publication, and is compensated for such advice is acting as a CTA and should register with the CFTC as a CTA unless it qualifies for an exemption from registration pursuant to CFTC Rule 4.14(a)(9).
Nadex does not condone its Members conducting business with any individuals or entities that are not in compliance with such registration requirements.
One particular warning
Nadex has learnt that a signal providing firm, John Anthony Signals (also known as JAX Auto), has claimed to have released a signal system designed for Nadex markets, which has been experiencing problems allegedly because “the Nadex platform didn’t always refresh”.
Nadex stresses it is not affiliated in any way with this signal provider and is unaware of any problems with respect to the alleged failure of the Nadex trading platform to refresh. Moreover, JAX Auto does not appear to be registered with the CFTC and it is unclear to Nadex whether the activity of JAX Auto requires registration under the Commodity Exchange Act.
Nadex has filed the necessary submission regarding the Advisory Notice on third party services with the U.S. Commodity Futures Trading Commission (CFTC). The rule amendments are set to become effective on December 15, 2015.
You can view Nadex’s submission by clicking here.