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"I’m confident that Congress will amend the law and that will help us deal with many of the problems in retail FX" |
News that the US Commodity Futures Trading Commission (CFTC) has approved the National Futures Association’s (NFA) recommendation to increase the minimum net capital requirement for US forex dealer members (FDMs) from $1 million to $5 million will have been widely applauded by all legitimate firms operating in the retail sector. Those of a more shady persuasion will have been less pleased, especially as they will have a relatively short time to comply. They will also be perturbed by the fact that Dan Roth, the NFA’s president and chief executive, is calling for it to be raised substantially further. The US retail foreign exchange market is often likened to the Wild West by industry observers and there is no doubt that it has attracted a lot of nefarious practices. It seems barely a week goes by when either the CFTC or NFA takes action or fines one of the FDMs. In testimony to the House of Representatives at the end of September, Roth highlighted the scale of the problem.