Retail Off-Exchange Forex Registration Deadline Immanent


The Commodity Futures Trading Commission (“CFTC”) has issued final, foreign exchange (forex) rules which become effective on October 18, 2010. The new rules require registration as a Retail Foreign Exchange Dealer (“RFED”) for any firm acting as a counterparty to certain retail, off-exchange forex transactions. Notwithstanding that, FCMs offering forex transactions to its retail customers, but acting primarily or substantially as traditional FCMs, are exempt from registering as an RFED; however, they must be approved as a Forex Firm.

Additionally, individuals who solicit or supervise the sale of retail, off-exchange forex transactions must pass two examinations: the National Commodity Futures Examination (Series 3) and the Retail Off-Exchange Forex Examination (Series 34). Individuals who were registered continuously as an Associated Person (“AP”) on or before May 22, 2008 will not be required to take the Series 34, but must amend their Form 8R through the NFA Online Registration System. As of October 18, 2010, those registered after May 22, 2008, or who were not continuously registered, must cease activities in retail, off-exchange forex transactions, until they have completed the Series 34.

Michael Schaps, Co-Author

Daniel E. LeGaye, Co-Author

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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