Closing Trades with FIFO

Will Traders Switch Forex Brokers on New NFA Rules?

NFA FIFO Rule for FOREX.

NFA is the industrywide, self-regulatory organization for the U.S. derivatives industry, providing innovative and effective regulatory programs. Designated by the CFTC as a registered futures association, NFA strives every day to safeguard the integrity of the derivatives markets, protect investors and ensure Members meet their regulatory responsibilities. A Forex Dealer Member or an IB may not enter into a bulk assignment, transfer, or liquidation of forex positions or accounts unless the assignment, liquidation, or transfer complies with CFTC Regulation and the procedures established by NFA in the Interpretive Notice entitled NFA Compliance Rule Procedures for Bulk Assignment or Liquidation of Forex Positions; Cessation of Customer Business.

What is the 'NFA Compliance Rule 2-43b'

NFA Rule (b) The NFA recently enacted Rule (b) which effectively eliminates hedging by forcing brokers to close trades on a First In First Out (FIFO) basis. The NFA has added clarification to the rule, stating that customers can instruct their broker to off-set like sized positions.

In addition to overseeing participants in the futures industry in the United States, the NFA is responsible for registration of, compliance of and arbitration among all companies and individuals conducting business in the futures markets. The agency has strict registration requirements and stringent rules of compliance, and it performs real-time surveillance of all U.

In addition to its role as a regulator, the agency provides several resources, such as the Background Affiliation Status Information Center or BASIC, which is an open information source for members and the general investing public with data on its members. The organization also has extensive investor information and a news center, which gives current information on NFA activities to the media, NFA members and other regulators. The news center also reports on speeches by NFA staff, as well as on enforcement and registration actions and rule submissions.

Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you. Background When the United States Congress established the Commodities Futures Trading Commission in , the same legislation allowed for the creation of registered futures associations.

Responsibilities In addition to overseeing participants in the futures industry in the United States, the NFA is responsible for registration of, compliance of and arbitration among all companies and individuals conducting business in the futures markets. Was this article helpful? We use cookies to enhance your visit on our website. If you continue to use the website, we assume that you agree to the use of cookies.

The anti-hedging rules implies new limits on trading software. While the NFA regulators might think they made a smart move, many forex traders are aggravated by this rule like here , and many brokers are struggling to implement these rules in their software systems.

Some software providers might not make it on time. But also traders that make only simple trades will find new limitations in their software which will be confusing. In the long run, a dynamic market for forex brokers will increase the competition. Forex brokers might work harder to offer better spreads and better service. Let the games begin.

After taking a short course about forex. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me.

I have a B. Given this background, forex software has a relatively bigger share in the posts. Forex Links for the Weekend Forex Crunch. An fx lawyer unparallels insights and experiences in the unique complexities of the futures and derivatives industry, especially in the areas of formation and registration, enforcement representation, regulatory compliance and foreign exchange transactions.

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Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me.

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