The National Futures Association (NFA) has issued a statement to remind U.S. regulated Forex dealer members (FDMs) that some new transparency rules are to come into force in March 2017.
After the Board of the NFA approved on the 17th of November a new compliance rule (NFA Compliance Rule 2-36), brokers will have to make amendments in order to comply. According to the paper sent out to FDMs, brokers will be obligated to provide clients with more detailed transaction Execution data.
[gptAdvertisement]
Clients of retail forex brokerages in the U.S. will be able to get detailed information about their orders in order to ascertain whether their trades have been executed fairly. Data from the FDM where the deal has been executed will be made available to the client to compare his execution when compared to other clients.
The data provided to the customer by the brokerage will include the foreign exchange transaction of the clients and the 15 transactions in the same FX pair before and after the customer’s transaction. There is also a time limitation of 15 minutes before and after the transaction.
Every brokerage operating with retail foreign exchange clients in the U.S. will have to display this feature in a visible location on its website and trading portals. Account statements sent to clients would also need to have this information displayed appropriately.
US FDMs will have to provide to the NFA copies of every request a client makes and the response that the brokerage provides. The rule will take effect on the 31st of March 2017.
Brokers will have 30 minutes to provide the customer with the full data on the transaction. This includes the side of the transaction (buy or sell), the quantity of currency, the currency pair, executing price including any mark-ups, commission charges and the currency denomination of the commission.
