Trading in the retail off exchange foreign currency market pdf

Forex or FX or retail off-exchange foreign currency transactions all refer to the same thing — trading foreign currencies for gain, usually in the spot market. The Forex markets have grown tremendously over the last few years and both individual investors and money managers are trading foreign currencies to make money. Unfortunately, many fraudsters have used the lure of the Forex markets to perpetuate scams and for some Forex has a negative connotation.

What is Forex? Information on Retail Off Exchange Foreign Currency Transactions | Hedge Fund Law Blog

While certain Forex transactions are regulated by the Commodities Futures Trading Commission CFTC , spot forex transactions are generally not regulated.

While the CFTC does not have the power to directly regulate spot forex transactions, it does have authority, under the anti-fraud provisions of the Commodities Exchange Act, to bring enforcement actions against certain fraudulent spot forex transactions. In order to close this regulatory gap Congress passed the Farm Bill which mandated that Forex transactions be subject to CFTC oversight and regulation. The CFTC will presumably release rules which require forex managers to register with the CFTC and become members of the National Futures Association NFA.

Trading in the Retail Off-Exchange Foreign Currency Market: - PDF Drive

The NFA has stated that they would like new categories of members to include the following designations: Forex CPO, Forex CTA, Forex IB, Forex Dealer Member and Forex Associated Person. The NFA has also stated that all Forex associated persons will need to pass a new exam called the Series 34 exam. Operating 24 hours a day, the forex market is highly liquid and most of the trading is conducted electronically or over the phone.

Banks, insurance companies, large corporations and other large financial institutions all use the forex markets to manage the risks associated with fluctuations in currency rates. In recent years, retail investors have also looked to the forex markets as yet another possible investment opportunity.

The Commodity Futures Trading Commission cautions investors to be wary of websites that purport to offer high yield investment opportunities in forex transactions, because this is a common area of internet fraud. The CFTC has posted several fictitious websites that are representative of typical websites that have been the subject of CFTC enforcement actions.

The interbank market does not typically include individual or retail customers. Your losses can be very large in a single day. Companies that tell you otherwise may well be engaged in illegal schemes. NFA Releases More Information on Forex Registration Hedge Fund Law Blog. You must be logged in to post a comment.

Hedge Fund Law Blog Hedge fund laws, starting a hedge fund, news and events… Menu Skip to content Home About Contact Us Disclaimer Definitions FAQ Forms. Information on Retail Off Exchange Foreign Currency Transactions 1 Reply. Forex Regulation While certain Forex transactions are regulated by the Commodities Futures Trading Commission CFTC , spot forex transactions are generally not regulated. Forex Registration Requirements please also see our other website on Forex Registration Normal 0 false false false EN-US X-NONE X-NONE Forex Disclosure Documents Part I Forex Disclosure Documents Part II Submitting Forex Disclosure Documents to the NFA Forex Fraud.

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