Overview

Forex Compliance provides regulatory compliance and consulting services in the areas of forex registration and forex compliance to those individuals and organizations that operate either as brokers, solicitors or managers of retail forex transactions. We can assist forex brokers, asset managers, investment advisers and hedge fund managers in the CFTC and NFA registration process and implement the proper compliance programs needed to maintain compliancy with CFTC and NFA rules and regulations.

CFTC Retail Forex Rule

The CFTC has recently passed a mandate requiring registration for most forex brokers and managers transacting in retail forex transactions. If your customers fall within the following definitions, then you will be required to register with the CFTC and become an NFA member under the new retail forex rules. A retail forex transaction is one between an eligible counterparty and a retail customer. Generally, retail customers are:

• Individuals with less than $10 million in total assets, or less than $5 million in total assets if entering into the transaction to manage risk, and who are not registered as futures or securities professionals;
• Companies, other than financial institutions and investment companies, with less than $10 million in total assets, or a net worth less than $1 million if entering into the transaction in connection with the conduct of their businesses; and
• Commodity pools that have less than $5 million in total assets.

How we can help

Through our forex registration and compliance services, we can greatly shorten the timeframe in which brokers and managers alike can meet regulatory requirements, thereby allowing such organizations to oursource their regulatory compliance needs and focus on their core competencies. We provide services in the following areas for Introducing Brokers (IBs), Commodity Trading Advisors (CTAs), and Commodity Pool Operators (CPOs):

• Forex Registration
• Compliance Document Preparation
• Compliance Outsourcing and Consulting

From start-up to tenure forex brokers and forex managers, Forex Compliance works with various clients in many different stages of their business lifecycle to provide forex registration, compliance and consulting services. In short, Forex Compliance will help clients circumnavigate the ever changing and complex regulatory landscape.

Our consultants are in regular and frequent contact with industry regulators and attorneys so our clients are always up to date on the latest regulatory rules and regulations. Our staff is comprised of industry experts in commodities regulation, including accountants, industry executives and compliance officers and also outsources industry attorneys for certain clients. Forex Compliance provides services to its clients on an hourly or project basis or via a upfront retainer. Please contact us for more information on pricing.

IMPORTANT NOTICE REGARDING OCTOBER 18, 2010 DEADLINE: Please note there may be significant delays in processing your application due to an influx of applications for forex registrations. Once your application has been submitted to the NFA, the registration process can take anywhere from 3 to 6 months and can take longer if you are not prepared. If you are required to be registered and have not done so by such date, you will not be permitted to conduct any retail forex business. Contact us as soon as possible so that we can ensure that your firm does not experience any unnecessary delays.

Forex Registration

Forex Registration Services

Depending on the complexity of your organization, the registration process with the CFTC and NFA can take from to 3 to 6 months to complete. Forex Compliance can provide forex introducing brokers, investment advisers, asset managers and hedge funds with assistance in the registration proves in the following registration categories:

• Introducing Brokers (IB)
• Commodity Trading Advisors (CTAs)
• Commodity Pool Operators (CPOs)

Please note that as a general rule, those individuals or organizations: (a) soliciting customers and acting as brokers would need to seek the IB registration category, (b) managing customer accounts on a discretionary (managed account) basis would need to seek the CTA registration category, and (c) operating a forex hedge fund or a forex fund of hedge funds (FoF) would need seek the CPO registration category. Click each registration category for more information.

Forex Introducing Broker Registration (IB)

Forex IBs are generally organizations that solicit accounts or orders for retail forex transactions (i.e. collect brokerage commissions from retail forex transactions). Forex IBs most commonly introduce its customers to an enumerated counterparty such as a FCM, Forex Dealer or RFED (Retail Foreign Exchange Dealers) which is a new registration category created under the new forex rule.

Forex Manager Registration (CTA)

Forex CTAs are generally organizations that manage customer accounts on a discretionary (managed account) basis and the funds of each customer is treated as a separate account and is not pooled with other investors as in a hedge fund or forex pool. Please note that advisors of managed forex accounts who utilize PAMM structures to trade multiple client accounts may also need to register as an investment advisor depending on the State in which the PAMM account is operated as some States may view the PAMM structure as a pooled investment vehicle, thereby a security.

Forex Hedge Fund Registration (CPO)

Forex CPOs are organizations that provide investment advice to forex investment pools or forex hedge funds. Forex Pools are typically investment partnerships in which investor funds are solicited to invest in the forex pool. If you operate a partnership that solicits outside funds to invest in the partnership, then you will most likely need to register as a Forex CPO. Please note that operators of pools may need to register as an investment advisor depending on the State in which the pool is operated as some States may view the pool’s offering document as a security.

Exam Requirements

Those seeking registration under the new rule are, at a minimum, required to take the Series 3 Exam and Series 34 Exam. However, those individuals that have obtained their Series 3 prior to May 22, 2008 and have not lapsed there license in the past two years are exempt from taking the Series 34. Organizations operating branch offices will be required to have at least one individual per branch with a Series 30 Exam.

Registration Fees

Below are the fees associated with each respective category of registration. Please note that our fees are in addition to the figures below:

• NFA Membership Fee: $750
• Principle and Associated Person (AP) Fee: $85 per person
• Firm Application (For Each Registration Category): $200

IMPORTANT NOTICE REGARDING OCTOBER 18, 2010 DEADLINE: Please note there may be significant delays in processing your application due to an influx of applications for forex registrations. Once your application has been submitted to the NFA, the registration process can take anywhere from 3 to 6 months and can take longer if you are not prepared. If you are required to be registered and have not done so by such date, you will not be permitted to conduct any retail forex business. Contact us as soon as possible so that we can ensure that your firm does not experience any unnecessary delays.

Forex Compliance Document Preparation

Forex Compliance can provide forex introducing brokers (IB), forex managers, commodity trading advisors (CTA), forex hedge funds and commodity pool operators (CPO) with compliance document preparation on an hourly or project basis via an upfront retainer. Given that “one size does not fit all”, each organization is unique and requires customized compliance documents. Our consultants will work closely with you to learn and understand your business model and develop a tailor made forex compliance solution that fits your organization’s needs. We provide the following types of compliance document preparation:

• Compliance Manuals for IBs, Forex Managers, CTAs, CPOs and Forex Hedge Funds
• Supplemental Customer Account Opening Documents for IBs
• Disclosure Documents for CTAs and Forex Managers
• Private Placement Memorandum for Forex Hedge Funds and CPOs (Reviews)

Compliance Manual Preparation

Forex Compliance can provide your organization with a customized written policies and procedures manual (WSP) that covers the following compliance areas:

• Designating Persons with Supervisory Responsibility
• Supervisory Compliance
• Anti-Money Laundering
• Disaster Recovery
• Ethics and Compliance Training
• Annual Review
• Branch Offices
• Promotional Material
• Sales Compliance
• Books and Records
• Cash Management
• Account Opening
• Communications
• Self-Exam Checklist

Account Opening Document Preparation

When forex introducing brokers (IBs) introduce customer accounts to clearing brokers (i.e. forex dealers, FCMs, RFEDs, etc.) many times, they only submit their clearing brokers documentation to the client for completion. We believe that such documentation is inadequate in protecting the IBs relationship with the customer and clearing broker. Forex Compliance provides supplemental customer account opening documentation to further protect the IB.

Disclosure Document Preparation

Forex Compliance can prepare Forex Disclosure Documents for CTAs that address of the compliance requirements of the CFTC and NFA such as, listing the principal risk factors of the CTA’s forex programs, conflicts of interest, advisory fees, background of the CTA, litigation and the CTA’s performance history and more.

Private Placement Memorandum Preparation

Forex Compliance can help you with forex hedge fund registration by reviewing and modifying your existing Confidential Private Placement Memorandum for CFTA and NFA compliancy. Outside counsel is required for this service.

IMPORTANT NOTICE REGARDING OCTOBER 18, 2010 DEADLINE: Please note there may be significant delays in processing your application due to an influx of applications for forex registrations. Once your application has been submitted to the NFA, the registration process can take anywhere from 3 to 6 months and can take longer if you are not prepared. If you are required to be registered and have not done so by such date, you will not be permitted to conduct any retail forex business. Contact us as soon as possible so that we can ensure that your firm does not experience any unnecessary delays.

Forex Compliance Outsourcing

Our consulting process involves a deep understanding of our client’s needs and goals. We believe that what distinguishes us in the marketplace, is our consultative approach and desire to listen to clients first and understand their business models, needs and goals. In addition to our forex registration and compliance document preparation services, with Forex Compliance, IBs, CTAs and CPOs (forex hedge funds) can outsource their ongoing forex compliance needs for CFTC and NFA compliancy.

Forex Compliance Outsourcing

Our compliance outsourcing services in include:

• Answering day-to-day compliance questions
• Modifying existing supervisory and compliance procedures to meet regulatory changes
• Assisting with documenting the customer complaint process
• Preparing you for a NFA audits
• Helping you conduct your Annual Compliance Meetings and Ethic Training
• Helping you respond to CFTC and NFA inquiries
• Reviewing websites, advertising and marketing material
• Reviewing 1FR-IB FOCUS reports (IBs only)
• Performing Online Registration System (ORS) updates
• Providing consultations on any other compliance issues specific to your organization's forex regulation needs

In addition to outsourcing your ongoing forex compliance needs, Forex Compliance can also made recommendations to industry partners, such attorneys, accountants, software providers and clearing firms.

Please contact us to find out more about how we can help you take your forex compliance needs to the next level.

IMPORTANT NOTICE REGARDING OCTOBER 18, 2010 DEADLINE: Please note there may be significant delays in processing your application due to an influx of applications for forex registrations. Once your application has been submitted to the NFA, the registration process can take anywhere from 3 to 6 months and can take longer if you are not prepared. If you are required to be registered and have not done so by such date, you will not be permitted to conduct any retail forex business. Contact us as soon as possible so that we can ensure that your firm does not experience any unnecessary delays.

News

Subject: CFTC Releases Final Rules Regarding Retail Forex Transactions
Release Date: August 30, 2010

Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the publication in the Federal Register of final regulations concerning off-exchange retail foreign currency transactions. The rules implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Food, Conservation, and Energy Act of 2008, which, together, provide the CFTC with broad authority to register and regulate entities wishing to serve as counterparties to, or to intermediate, retail foreign exchange (forex) transactions.

“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. “All CFTC registrants involved in soliciting and selling retail forex contracts to consumers will now have to comply with rules to protect the investing public. This is also the first final rule that the Commission has published to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act. We look forward to publishing additional rules to protect the American public.”

The final forex rules put in place requirements for, among other things, registration, disclosure, recordkeeping, financial reporting, minimum capital and other business conduct and operational standards. Specifically, the regulations require the registration of counterparties offering retail foreign currency contracts as either futures commission merchants (FCMs) or retail foreign exchange dealers (RFEDs), a new category of registrant. Persons who solicit orders, exercise discretionary trading authority or operate pools with respect to retail forex also will be required to register, either as introducing brokers, commodity trading advisors, commodity pool operators (as appropriate) or as associated persons of such entities. “Otherwise regulated” entities, such as United States financial institutions and SEC-registered brokers or dealers, remain able to serve as counterparties in such transactions under the oversight of their primary regulators.

The final rules include financial requirements designed to ensure the financial integrity of firms engaging in retail forex transactions and robust customer protections. For example, FCMs and RFEDs are required to maintain net capital of $20 million plus 5 percent of the amount, if any, by which liabilities to retail forex customers exceed $10 million. Leverage in retail forex customer accounts will be subject to a security deposit requirement to be set by the National Futures Association within limits provided by the Commission. All retail forex counterparties and intermediaries will be required to distribute forex-specific risk disclosure statements to customers and comply with comprehensive recordkeeping and reporting requirements.

The final rules become effective October 18, 2010.

For questions and answers regarding final retail foreign exchange rule, download: Final Forex Rules

Last Updated: August 30, 2010

Contact Us

Forex Compliance
815-A Brazos Street, Suite 265
Austin, TX 78701
Tel: +1 512-692-6145
Fax: +1 512 697 0046

Sales

Contact a Forex Compliance representative to learn more about our forex regulatory compliance services. sales@forexcompliance.org

General Information

Contact us to get general information or to provide us with feedback so that we can better serve our clients. info@forexcompliance.org

Recruiting

Contact our human resources department and learn more about job openings at Forex Compliance. jobs@forexcompliance.org

IMPORTANT NOTICE REGARDING OCTOBER 18, 2010 DEADLINE: Please note there may be significant delays in processing your application due to an influx of applications for forex registrations. Once your application has been submitted to the NFA, the registration process can take anywhere from 3 to 6 months and can take longer if you are not prepared. If you are required to be registered and have not done so by such date, you will not be permitted to conduct any retail forex business. Contact us as soon as possible so that we can ensure that your firm does not experience any unnecessary delays.

Request Info

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