Rule change allows US forex clients to gain access to transaction data

Rule change allows US forex clients to gain access to transaction data

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Forex brokers that fall under the regulation of the US National Futures Association (NFA) will be required to provide customers access to certain transaction execution data as of 31 March, 2017, the regulator said on Thursday night. This will happen since the NFA’s proposals for rule amendments have been recently approved by the Commodity Futures Trading Commission (CFTC).

“The amendment provides retail forex customers with a framework for obtaining execution information to review the quality of the execution a customer received compared to that of other customers of the FDM,” the NFA statement read.

Brokers have to provide relevant information within 30 minutes of receiving a request.

Upon customer request, forex dealer members (FDMs) will have to provide information about a client’s executed forex transaction, including for the 15 transactions in the same currency pair that occurred immediately before and after the customer’s transaction (limited to those transactions that occur 15 minutes before and after the transaction).

The information customers can receive is as follows:

  • Execution date and time (to the nearest millisecond in Eastern time);
  • Customer side (i.e., buy or sell);
  • Quantity;
  • Currency Pair;
  • Execution price (including any mark-up);
  • Commission and other charges assessed by the FDM (if applicable); and
  • Currency denomination of commission or other charges.

In addition, forex brokers are required to publish information about the availability of such information in three places – their website, the customer’s trading portal, and each customer transaction statement.

Brokers will need to send the NFA a copy of any customer request they receive, as well as their response.

The NFA is a self-regulatory organization overlooking at the US derivatives markets, including on-exchange traded futures, retail off-exchange forex and over-the-counter (OTC) derivatives (swaps). It has tens of thousands of firms and associates as members. It acts as an external dispute resolution (EDR) organization in case of disputes between its members and their clients in smaller cases with arbitration claims of up to $150,000.

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