It's going to be headquatered in London. Not sure about the NFA's reach there. (Matter of fact, they don't have any jurisdiction there.) Besides, the NFA regulates US brokerages. This thing is just an order matching platform with centralized clearing service, not a brokerage. And it's not an exchange in the classcial sense either. Therefore, global participation is highly likely. Especially because of the multilateral credit and clearing it's provide.
The goal of it is to bring as much of the unregulated business under one roof. It's cost effective enough to be attractive to most participants. Nevertheless, the Spot market will remain unregulated even when this thing becomes established. In a way, if enough participation ensues, it'll make a sort of "synthetic self-regulation."
The problem with Spot Forex today is the small amount of counterparties. We're at the mercy of major liquidity providers such as DBK, RBS, UBS, CITI, ect. Imagine if Joe Schmoe from Cucamunga has 200,000 Euros to sell. And Johann Doeschmitt from Dresden is looking to buy 200,000 Euros. With something like FX Marketspace, they could trade with each other via their respective brokers who provide access to FXMS without having to first transact with the Major dealing banks (Liq Prov). Or as the case actually is for non- ECN type ... transacting with their Market makers (bucketshop) who in turn transacts with Dealing banks.
No more requotes or failing to honor quotes. Orders matched, trade centrally cleared. Pricing will be interbank or better. Best bid/ask will be known to all participants.