Aug 11, 2015 | News

NFA Financial Requirements – Customer Liability Requirements

Under CFTC Regulation 5.8, FDMs that hold assets used to cover retail forex customer liabilities are now required to instruct the depositories holding these funds to report the balances in their accounts on a daily basis to NFA or a 3rd party designated by NFA.  According to NFA Financial Requirement Section 14, the depository must comply with this request in order to be an acceptable depository for retail forex.

Phase 1 of the Financial Requirements Section 1 became effective on October 15, 2014.  Phase 1 required all bank depositories holding assets to cover the amount owed to forex customers to report end-of-day balances in those accounts to NFA.  NFA worked with CME Group Inc to collect these balance reports from the depositories via the SWIFT network.

Phase 2 will become effective August 31, 2015 beginning with reporting of the end of day balances on September 1.  In order to be considered an acceptable depository, the FCM must ensure that these depositories report the end-of-day balances to NFA beginning with the August 31, 2015 balances.

 

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