Quote from Chood:
Zilch, if you're a RefcoFX customer. You cannot possibly benefit from either one. Why is "unregulated" such a hard concept?
Chood, stop spreading false information!!!
Once again, I do not claim complete regulation (if there is such a thing), but this is what you would find in the NFA brochure if u bothered to read:
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Who regulates off-exchange foreign currency trading?
The CFTC has some regulatory authority over retail off-exchange
forex markets. The Commodity Exchange Act (CEA) allows the
sale of OTC forex futures and options to retail customers if, and
only if, the counterparty (the person on the other side of the
transaction) is a regulated entity. These regulated entities include
the following:
financial institutions, such as banks and savings
associations,
registered broker-dealers and certain of their affiliates,
registered futures commission merchants (FCMs) and
certain of their affiliates,
certain insurance companies and their regulated affiliates
financial holding companies, and
investment bank holding companies.
Under the CEA, the CFTC has the authority to shut down any
unregulated entity that acts as a counterparty to forex futures or
options transactions with retail customers. The CFTC also has
the authority to take action against registered FCMs and their
affiliates for violating the anti-fraud and anti-manipulation provisions
of the CEA in connection with OTC forex transactions
involving retail customers, but the CFTC cannot adopt rules to
regulate these transactions.
NFA has rules to protect customers in the retail off-exchange
forex market. As mentioned later in this booklet, firms that introduce
customers to forex dealers do not have to be regulated entities.
NFAâs rules provide, among other things, that a forex dealer
FCM must take responsibility for the activities of unregulated
entities that solicit retail customers. Additionally, NFAâs rules
require forex dealer FCMs to:
observe high standards of commercial honor and just
and equitable principles of trade in connection with
the retail forex business;
supervise their employees and agents and any affiliates
that act as counterparties to retail forex transactions;
maintain a minimum net capital requirement based on
the value of open customer positions; and
collect security deposits from those customers.
NFAâs forex rules do not apply to all FCMs and their affiliates,
however. Therefore, you should ask the dealer if NFA regulates its
forex activities.
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