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April 24, 2014

National Futures Association (NFA) Amends Futures Commission Merchants Capital Requirements for Forex Transactions with ECPs

The National Futures Association (NFA) has amended the financial requirements applicable to member futures commission merchants (FCMs) acting as counterparties in foreign exchange (forex) transactions. Pursuant to NFA’s Financial Requirements Section 1(a), all member FCMs are required to maintain adjusted net capital equal to or in excess of certain amounts enumerated in Section 1(a). The amendment adds a provision to Section 1(a) to require an FCM acting as a counterparty in a forex transaction with an eligible contract participant to maintain adjusted net capital in excess of $20,000,000.

The amendment will be effective June 20, 2013.

NFA Notice to Members I-13-10 is available here. NFA Financial Requirements Section 1(a) is available here.

©2014 Katten Muchin Rosenman LLP

About the Author

Kevin M. Foley, Finance Attorney, Katten Muchin law Firm
Partner

Kevin M. Foley has extensive experience in commodities law and advises a wide range of clients, both in the United States and abroad, on compliance with the Commodity Exchange Act and the rules of the Commodity Futures Trading Commission (CFTC) affecting traditional exchange-traded products, as well as the over-the-counter markets involving swaps and other derivative instruments. His clients include futures commission merchants, derivatives clearing organizations, designated contract markets, foreign boards of trade and an industry trade association.

312-902-5372

About the Author

James M. Brady, Katten Muchin Law Firm, Finance Attorney
Associate

James Brady concentrates his practice in financial services matters.

312-902-5362

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