U.S. CFTC issues final forex exchange market rule

WASHINGTON, Aug 31 (BestGrowthStock) – The U.S. futures regulator
issued a final rule late Monday for the retail foreign exchange
market, which included relaxing an earlier proposal that would
slash leverage available to investors participating in these
transactions.

The U.S. Commodity Futures Trading Commission rule put in
place requirements for retail foreign exchange products,
including registration, disclosure, record keeping, financial
reporting and minimum capital standards.

A key change in the rule, which goes into effect on Oct.
18, will allow the National Futures Association to put in place
leverage rules as long as they require investors to place a
minimum 2 percent security deposit in the case of major
currencies and 5 percent of the notional value of the
transaction for all other currencies.

The agency said it will periodically review these
parameters to determine if they need to be adjusted.

The CFTC earlier proposed limiting leverage for retail
customers on forex transactions to a ratio of 10-to-1, which
was criticized by dealers, lawmakers in Congress and others who
feared it could push investors into overseas markets with less
protection.

“These rules of the road will help protect the American
public in the largest area of retail fraud that the CFTC
oversees: retail foreign exchange,” CFTC Chairman Gary Gensler
said in a statement.

This marked the first final rule the CFTC has published
from the Dodd-Frank financial reform bill that went into effect
in July. The CFTC has organized its to-do list into 30 topic
areas it must address during the next year.

(Reporting by Christopher Doering and Roberta Rampton)

U.S. CFTC issues final forex exchange market rule