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Screenshot of a breaking news alert e-mail from Q2 2017
Additional quarterly and monthly reports will be required by all US based Forex Dealer Members
Starting from February 28th all Forex Dealer Members (FDMs) operating within the US will be required to file additional reports to the National Futures Association. Changes are aimed at providing further transparency to the foreign exchange market. All FDMs will be required to report specific information on a monthly and quarterly basis through the already existing EasyFile electronic filing system.
Every month FDMs will be required to file their FOREX report with the first due on the 25th of March consisting of information for the month of February or as of the 28th of February. Several new details are requested by the NFA and they are broken in two categories – monthly and quarterly. The list is quite substantial so there is no doubt that there will be new costs for the companies that provide forex trading services in the US.
The monthly information requested adds the following bullet points:
- Identify entities where house commodity trading accounts were held and the number of accounts held at each entity (at any time during the prior month);
- Identify all counterparties utilized by the firm to any repurchase or reverse repurchase agreements (at any time during the prior month);
- Identify any non-trade based fees the firm charged to customers (at any time during the prior month);
- Identify all forms of funding accepted by the firm for customer trading accounts (at any time during the prior month);
- Identify all formal lines of credit held by the firm during the prior month and the amount of credit available from that line. Also report the total amount drawn from each line during the month regardless of whether the amount has been repaid;
- Number of customer accounts whose trading volume represents 10% or more of the firm’s overall trading volume (as of the month end reporting date);
- Number of proprietary and non-customer accounts whose trading volume represents 10% or more of the firm’s overall trading volume (as of the month end reporting date);
- If the firm allows employees to engage in outside business activities; and
- If the FDM offered any new products or services that the firm did not offer in previous monthly reporting period;
Quarterly reporting will include data until the 31st of March and the fiurst one is due on the 24th of April:
- Any material administrative, civil, enforcement, or criminal complaints or actions filed against the firm where such complaints or actions have not concluded, or any enforcement complaints or actions filed against the firm during the last three months;
- Identify the five Associated Persons who generated the greatest revenue during the last 3 months; and
- Frequency with which the firm performs scenario analyses to assess its financial condition and continued compliance with capital and other regulatory requirements (i.e., stress testing).
For the full press release detailing new NFA regulation, visit the NFA’s website.