In November, NFA proposed new rules seeking to increase transparency of transaction execution data. Today, it has been announced that NFA New Forex transaction rules confirmed. What kind of information can traders request?
6 January, AtoZForex – The US Commodities Futures Trading Commission (CFTC) has approved the new rules proposed by the self-regulatory body, National Futures Association (NFA). The proposed rules are related to the disclosure of trading information around Forex transactions. The changes will come into force on the 31st of March.
The NFA proposed the new rules back in November. With the main objective being to empower traders with greater transparency in relation to transaction execution data. The rules will also enable traders to receive execution information. So, clients could review the quality of the execution they received compared to that of other clients. The changes were unanimously confirmed by the NFA’s board and sent to the CFTC for the regulator’s approval. Today, it has been reported that NFA new Forex transaction rules confirmed.
NFA New Forex transaction rules confirmed: which information can clients request?
Pursuant to the NFA’s new rules, a broker will have to provide the client with the following transaction data 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. This is done upon a customer’s request. A brokerage needs to send this data to a client within 30 minutes following the request. The transaction information is the following: execution date and time (to the nearest millisecond in Eastern time); customer side (i.e., buy or sell); quantity; and currency pair. Another data that have to be provided is the execution price (including any
The transaction information is the following: execution date and time (to the nearest millisecond in Eastern time); customer side (i.e., buy or sell); quantity; and currency pair. Another data that have to be provided is the execution price (including any mark-up); commission and other charges assessed by the broker(if applicable). As well as currency denomination of commission or other charges.
Broker's Notice to clients
From the 31st of March, each regulated broker in the US has to inform its clients of their ability to ask for the above-stated information. Brokers will need to display a notice about this possibility in three different places. It includes the broker’s website, the customer’s trading portal, and each customer transaction statement.
Apart from that, each broker has to send the NFA a copy of any client’s inquiry together with the broker’s answer in the form required by the NFA. Additionally, NFA personnel will reach out to brokers and provide them with further information about the content and method of submission.
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