NFA at it again, drops bomb on IBs

[FredForex]

The NFA has made more moves toward regulation by changing IB requirements. THis will have a big impact on accounts and the way they are managed.

Profiting with Forex (PFX) - Watch Forex Professionals Currency Trade

[scorpion]

I really don't like this update. NFA obviously doesn't take the account of the difficulties that foreign IBs will meet. If NFA had branched their offices out to foreign soils first before doing this, it would be just fine. Nonetheless, they expect foreign IBs to fly to USA, having their ten fingers scanned, stripped and so on to satisfy the regulation.

What I mean, if this is true, is "WTF". I've seen before my eyes the so-called regulated IBs giving advice and rebate to their traders. The new regulation makes no sense at all considering that NFA itself doesn't really regulate the registered IBs. They should have cleaned their own mess before reaching out to clean for the others. Absolutely ridiculous!

I do hope this is not entirely true. I wonder if you know where the NFA annoucement is at nfa.futures.org website.

[scorpion]

Quoted from: National Futures Association | NFA Manual / Rules

RULE 2-39. SOLICITING, INTRODUCING, OR MANAGING FOREX TRANSACTIONS OR ACCOUNTS.
(Click Here to Print this Rule) [Adopted effective September 15, 2005. Effective dates of amendments: February 13, 2007; June 5, 2007 and September 21, 2007.]

(a) Except for Members who meet the criteria in Bylaw 306(b) and Associates acting on their behalf, Members and Associates who solicit customers, introduce customers to a counterparty, or manage accounts on behalf of customers in connection with forex transactions shall comply with subsections (a), (b), (c), and (e) of Compliance Rule 2-36.

(b) No Member except a Forex Dealer Member or a Member who meets the criteria in Bylaw 306(b) may accept forex orders or accounts or receive compensation-directly or indirectly-for forex transactions from any person unless that person is a Member or Associate of NFA, meets the criteria in NFA Bylaw 306(b), or would be exempt from Commission registration if it were acting in the same capacity in connection with exchange-traded futures products.

(c) For purposes of this rule, the term "customer" means a person that is not an eligible contract participant as defined in Section 1a(12) of the Act and includes persons who participate in pooled accounts.

It is clear enough that forex dealer member is allowed to accept business from unregistered IBs. What NFA is trying to do is forcing current FCMs to pay for FDM membership from $45,875 to $125,000 depending on firm's annual revenue. The FDM then will have to pay up to $50,000 depending on how many unregulated entities the firm has partnered with. Nice trick NFA! Nice trick!

Just a typical money-faced regulatory body writing new rules to make sure that they will earn more at the end of the year.

[RebateFX.com]

What do you expect. NFA is a private club. They already have the larger members voting to squeeze out their immediate competition by raising the minimum operating capital from $5million to $20million. They have to make up for the loss of membership fees somehow, so why not seek out the myriad of rebate paying IB's who already earn a meagre wage after they pay their rebates.
NFA can go to hell if they think they are going to force me to join them. If I'm not actually holding the money of the trader, only introducing them, I shouldn't need to be NFA registered, afterall, we IBs are just glorified support staff really.